NAR, MBA share praise for GOP tax bill

“We appreciate House leaders for taking this important step with a bill that supports hardworking families and strengthens the real estate economy,” Shannon McGahn, NAR’s executive vice president and chief advocacy officer, said in a statement. “With lower tax rates, SALT relief, and new incentives for small businesses and community development, this proposal brings real benefits to everyday Americans

The bill now moves to the Senate where further changes are expected before it can be signed into law. Additional items in the version passed by the House include enhancements to the Low-Income Housing Tax Credit (LIHTC), estate tax thresholds and tax-advantaged child investment accounts that can be used for first-time home purchases.

“MBA is pleased that this bill includes numerous tax provisions that will help to increase real estate investment in communities and improve the financial outcomes of homeowners, renters, and our members’ businesses,” president and CEO Bob Broeksmit said in a statement. “We have worked diligently with Congressional leadership and committee members to preserve key elements of the 2017 Tax Cuts and Jobs Act.

“This includes the deduction for qualified residence interest, the up to $500,000 homeowner exclusion on the gain on the sale of a principal residence, Section 1031 like-kind exchanges, and the continued deductibility of business interest for real estate.”

Broeksmit specifically praised the bill’s expanded deduction for qualified business income, improvements to the LIHTC program and a new round of opportunity zones.

A recent national poll commissioned by NAR found strong voter support for the tax provisions included in the 2017 Tax Cuts and Jobs Act, which this year’s bill seeks to extend or expand.

The survey — conducted April 3-6 among 1,000 registered voters — showed that 86% support lower individual tax rates, 83% support the small-business deduction and 80% favor tax incentives to stimulate investment in underserved areas.

“While significant changes are possible as this bill moves to the Senate, NAR will stay closely engaged with lawmakers to ensure real estate remains a central focus,” McGahn said. “We are committed to advocating for provisions that expand opportunity, support homeownership, strengthen communities nationwide, and put the American Dream within reach for more families.”

Key provisions in the bill include:

Qualified business income (QBI) deduction

• The bill permanently increases the QBI deduction from 20% to 23%. 
• This deduction benefits more than 90% of NAR members, who are classified as independent contractors or small-business owners. 

State and local tax (SALT) deduction

• The SALT deduction cap is quadrupled from $10,000 to $40,000 for households earning less than $500,000.  But the bill does not eliminate the marriage penalty. Thus, whether taxpayers are single filers or married couples filing a joint return, they can deduct a maximum of $40,000 in state and local taxes. The income cap and deduction will grow 1% each year during a 10-year window. 

Individual tax rates

• Current individual tax rates, lowered as part of the Tax Cuts and Jobs Act, are made permanent and indexed for inflation.

Mortgage interest deduction (MID) 

• The draft preserves and makes permanent the MID at its current level.

Business SALT and 1031 like-kind exchanges

• The draft bill protects Section 1031 like-kind exchanges, which NAR said are often erroneously regarded as a tax loophole.    
• It also includes no changes for most businesses that deduct state and local taxes.
• While the bill provides limits in state-level business SALT workarounds for certain high-income professionals (e.g., law firms, hedge funds, consulting businesses and other services), NAR said the provisions do not appear to impact real estate professionals. 

Additional positive tax provisions for the real estate economy:

Low-Income Housing Tax Credit (LIHTC) 

• Key provisions from the LIHTC Improvement Act will be included to support affordable housing development. 

Child tax credit increased to $2,500 (2025–2028) 

• Temporarily raises the child tax credit through 2028 and then indexes it for inflation starting in 2029. 

Creation of tax-advantaged child investment accounts 

• Can be used for qualified expenses of the beneficiary such as first-time home purchases. 

Permanent estate and gift tax threshold set at $15 million (inflation-adjusted) 

• Prevents a significant drop in exemption levels and supports generational wealth transfers, which NAR said aligns with organizational priorities.

No top tax-rate increase

• The proposed top rate of 39.6% was removed from the bill. 

Restoration of “Big 3” business tax provisions

• Full expensing of research and development 
• Bonus depreciation 
• Fixes to interest expense deduction limits 

Immediate expensing for certain industrial structures

• Applies to structures used in manufacturing, refining, agriculture and related industries