President Donald Trump’s 2024 campaign platform came with five economic policy “pillars.” One pillar was cutting taxes, with the platform specifically promising to make permanent provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that Trump signed into law during his first term.
The U.S. House Ways and Means Committee released a draft of its tax reform bill on Monday, May 12. The bill is referred to as the “One, Big, Beautiful Bill” in the official text, the name that Trump himself has used to refer to the legislation.
Many of the legislation’s provisions impact real estate professionals and consumers—the current draft earned praise from the National Association of REALTORS® (NAR), which has advocated for real estate’s priorities to lawmakers during the process.
NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn said in a press release that:
“This is a very strong opening bid for our advocacy priorities. This draft language preserves or strengthens a raft of provisions vital to housing affordability, including making the current lower income tax brackets permanent. These are all measures we have worked tirelessly to advocate for on behalf of our members.”
However, despite praising the bill as “overwhelmingly positive for the real estate economy and small businesses,” McGahn said the celebration should not come just yet, and that NAR will continue to advocate for its priorities as the legislation makes its way through Congress. McGahn said in the NAR release:
“I would caution that this is just the first draft. The bill will continue to evolve as it moves through the committee process and eventual passage in the House and Senate, with many amendment votes to come.”
The five pieces of the current draft that NAR lists as the biggest priorities are:
An increase to the qualified business income deduction
Real estate agents/NAR members are largely classified as independent contractors or small business owners. That makes them eligible for the Qualified Business Income (QBI) deduction. Per NAR, the QBI deduction benefits over 90% of the association’s members.
The deduction allows eligible taxpayers to deduct up to 20% of their qualified business income from their taxes. The provision also includes a benefit for real estate investors, who can deduct up to 20% of their dividends from a qualified real estate investment trust (REIT).
The QBI deduction was one of the provisions established in the TCJA. It is currently set to sunset on Dec. 31, 2025. The current draft of the tax reform bill would not only make the QBI deduction permanent, but would raise it from 20% to 23%.
A raise on the SALT deduction cap
One of the most contentious provisions of the TCJA was a change to the State and Local Tax (SALT) deduction.
SALT permits taxpayers to deduct the cost of certain state and local taxes from their federal taxes—such as property taxes and state income or sales taxes. The TCJA introduced a cap to the SALT deduction of $10,000 for single filers or married couples filing a joint tax return.
The current tax reform bill would keep a cap on the SALT deduction in place, but raise it from $10,000 to $30,000 for households earning less than $400,000.
Both the SALT deduction itself and the cap are the subject of strong split opinions from both parties. Some claim the deduction only directly benefits already wealthy individuals who reside in states with high local tax rates. Back in 2021, Senate Majority Leader John Thune (R-SD) described the SALT deduction as a subsidy for “millionaires who live in states like New York and California.” Conversely, others—including some Republican politicians representing blue states—have pushed to raise the cap.
While Democrats universally opposed the TCJA, some members—largely from areas with high local taxes—have previously pushed to remove or increase the SALT cap as well.
The SALT cap is another TCJA provision that was set to expire at the end of 2025 upon passage. Since its implementation, however, there have been numerous proposals put forth to remove or lift the cap, which consistently fell through. Trump himself pledged to “get SALT back” if elected in a September 2024 Truth Social post.
CNN reported that several Republican congressional representatives representing New York state districts still believe the $30,000 cap raise is still too low for them to support it.
“Business SALT” provisions are protected
It is not only individual or married couple tax payers that have access to SALT-like benefits. “Business SALT” or “C-Salt” allows businesses to deduct the cost of their state and local taxes the same way an individual would. The current draft of the bill contains no changes to this that would directly impact real estate professionals, according to NAR.
It had previously been reported by Politico that House Republicans were considering limits on corporate SALT deductions as an offset to other spending changes in the bill. Nonprofit The Tax Foundation claimed that such a proposal would reduce long-run economic output by 0.1%.
Also preserved in the current draft of the bill are Section 1031 Like-Kind Exchanges—this allows a property owner to exchange a property used for business or investment for another property of the same type, without having to report a loss or gain. The TCJA amended Section 1031 so that only “real property” can qualify for a Like-Kind exchange, rather than personal or intangible property.
Individual tax rates are not raised
The TCJA generally lowered marginal tax rates for individuals across income brackets. The bottom bracket rate remained 10%, while the second highest rate was still set at 35%. However, other bracket rates dropped: the top rate fell from 39.6% to 37%, for instance.
These changed rates were another portion of the TCJA set to expire at the end of 2025, at which point marginal rates would revert back to their pre-TCJA levels. The current draft of the bill would end the sunset provision, thus maintaining the current lower marginal rates indefinitely. The rates would also be indexed for inflation, meaning the cut-off income for different rates would adjust in response to inflation.
NAR praised the proposal to keep the rates at the lower TCJA-levels, particularly calling attention to the removal of a provision to restore the top marginal rate to 39.6%.
The mortgage interest deduction is preserved
The bill maintains the mortgage interest deduction (MID), not altering or removing it as a cost offset as some—per NAR—had feared prior to the bill draft’s release.
The MID allows a homeowner to deduct the amount of interest paid on their mortgage from their income. NAR praised the bill text as “maintaining a key tax benefit for homeowners and supporting housing market stability” via its preservation of the MID.
The TCJA did not technically cut the MID, but its changes to the tax code did have reverberation effects on the deduction.
The TCJA increased the standard deduction for individual taxpayers from $6,500 to $12,000, and from $13,000 to $24,000 for joint filers. A 2020 study by the Congressional Research Service found that this change to the standard deduction made itemized deductions “less attractive” to taxpayers, thus less homeowners are claiming the mortgage interest deduction, with most coming on the “upper end” of incomes. As a result, the cost of the deduction to the government more than halved from $66.4 billion to $30.2 billion between 2017 and 2020.
The study said the effect of the deduction on homeownership rates is unclear.
Other real estate-relevant provisions
While NAR stressed the five legislative provisions above as the most important, the release highlights several “additional positive tax provisions for (the) real estate economy.”
For instance, the bill includes language from another bipartisan bill—the Affordable Housing Credit Improvement Act of 2025—that would expand the Low-Income Housing Tax Credit (LIHTC), a tax break for developers contingent on them reserving some constructed units for low-income households.
“At a time when we face a historic shortage in housing supply, it is essential that this legislation does not worsen the affordability crisis,” said McGahn in the NAR press release.
The National Association of Home Builders (NAHB) has voiced support for the Affordable Housing Credit Improvement Act of 2025. In an April press release, the NAHB said that the bill “addresses the need to boost housing production to ease the nation’s housing affordability crisis. The bill would help finance more than 2 million additional multifamily units over the next decade.”
The bill also renews the provision of the TCJA establishing Opportunity Zones—or designated areas where developers can receive tax breaks so as to incentivize community revitalization. Current Housing and Urban Development (HUD) Secretary Scott Turner, who oversaw opportunity zones during the first Trump administration, voiced continued support for the program during his confirmation hearing in February.
For the full NAR release about the bill, click here. For the full text of the legislative package, click here.