The newly signed One Big Beautiful Bill Act packs a punch for commercial real estate and multifamily owners. By restoring 100% bonus depreciation, making Opportunity Zones permanent, and beefing up affordable-housing tax credits, the law opens the door to bigger deductions, new development incentives, and fresh deal flow.
Below is a closer look at what changed—and why it matters for investors.
100% Bonus Depreciation Is Back—and Permanent
Arguably the most impactful provision in the bill, the restoration of 100% bonus depreciation means investors can now immediately expense the full cost of qualifying assets placed in service after January 19, 2025. This is a significant reversal from the previously planned phase-down (which would have dropped to 40% in 2025), and it opens up a huge window for tax-efficient capital deployment.
What does this mean for real estate?
With a cost segregation study, investors and developers can break down a property into faster-depreciating components—like lighting, HVAC, flooring, and appliances—unlocking massive first-year deductions. This strategy dramatically boosts after-tax cash flow, making new acquisitions and renovations even more compelling.
Section 179 Cap Increased for Small Businesses
In tandem with bonus depreciation, the Section 179 expensing limit has increased to $2.5 million, expanding access for smaller owners and operators to fully deduct the cost of eligible equipment, technology, and property improvements. This is particularly relevant for smaller-scale multifamily operators and local CRE businesses modernizing infrastructure or upgrading tenant spaces.
Opportunity Zones: No More Sunset
The Opportunity Zone (OZ) program—which was facing an uncertain future—has now been extended indefinitely. Investors can continue to roll capital gains into OZ funds, defer taxes, earn step-ups in basis, and even eliminate long-term capital gains under certain holding conditions.
Why it matters: This stability creates a more predictable investment framework for OZ-driven development projects and impact-oriented funds, allowing for more thoughtful planning, underwriting, and execution in underserved markets.
LIHTC Expansion: A Boost for Affordable Housing
The bill also expands the Low-Income Housing Tax Credit (LIHTC) by raising state-level allocations and reducing the bond-financing threshold. In short, more capital will flow into affordable housing development—especially targeting workforce and low-income residents.
For developers and equity partners focused on impact investing or ESG goals, this presents an attractive opportunity to pursue mission-aligned projects with strong financial backing.
Additional CRE-Friendly Provisions
Beyond the headline changes, the bill includes several other tax-code tweaks worth noting:
What Should Investors Do Now?
The timeline to act is short. Most provisions activate in early 2025, so smart planning now can lead to big savings next year. Consider the following steps:
Final Takeaway
With this bill, Congress has clearly prioritized pro-investment, pro-construction, and pro-growth policies—offering more tax shields, expanded incentives, and new funding pipelines. Whether you’re buying, building, or repositioning assets, 2025 is shaping up to be a landmark year for commercial real estate.
As always, consult with your legal and tax professionals before making decisions—but if you’ve been waiting for the right moment to move, this could be it.