President Donald Trump’s One Big, Beautiful Bill certainly lives up to the “big” part, with an estimated long-term cost of more than $4 trillion, according to the Bipartisan Policy Center.
Whether it qualifies as “beautiful” depends on who you ask. This applies to just about every corner of the U.S. economy — including housing.
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The bill, signed into law on July 4, could have both a positive and negative effect on the housing market. Here are six ways it might impact housing for both good and bad.
The Good
- Tax advantages for certain buyers. The bill includes a temporary state and local tax (SALT) limit of $40,000 starting in 2025, CNBC reported. This benefit begins to decrease when you have $500,000 or more of yearly income. As Newsweek noted, the new limit represents a steep increase from the previous limit and could mean thousands of dollars in savings for homeowners in high-tax states such as New York, New Jersey, Massachusetts and Illinois. This in turn could “create a real estate boom again,” according to Ed Fernandez, CEO of exchange investment company 1031 Crowdfunding.
- Investor incentives. The bill’s provisions will “likely stimulate” investor activity in Opportunity Zones, according to Salim Chraibi, CEO of Florida-based real estate company Bluenest Development. This could benefit home sellers in high-demand areas. However, it might also drive up prices in certain markets unless “guardrails are in place to preserve affordability and ownership access for local residents,” Chraibi told GOBankingRates in an email.
- Depreciation bonus. Abe Schlisselfeld, senior managing director and national real estate industry leader at CBIZ, told Newsweek that one of the most attractive parts of the bill is the return of 100% bonus depreciation. “This would allow you to fully deduct the cost of qualifying renovations, property improvements and certain building components immediately, instead of spreading the deductions out over several years,” Schlisselfeld said. “This could be a game changer for your 2025 renovation or development plans.”
Check Out: 8 Ways Trump’s ‘One Big Beautiful Bill’ Could Offer Tax Relief
The Bad
- It does not address affordability issues. The median sales price of homes in the United States rose to a new record high of $435,300 in June, according to the National Association of Realtors. Steep prices continue to be a drag on housing in many markets, but the Trump bill “lacks direct support for affordable homeownership,” Chraibi said. “Without targeted policies — such as down-payment assistance or incentives for developing workforce-focused, for-purchase homes — working families remain locked out of the equity and stability that come with homeownership.”
- Clean energy credits will end. Certain provisions of the bill terminate the Energy Efficient Home Improvement Credit, the Residential Clean Energy Credit, the New Energy Efficient Home Credit, and deductions for energy-efficient commercial buildings. Ending these credits could stall construction and lead to higher home prices, Newsweek reported. It cited an analysis from Groundwork Collaborative, a progressive advocacy group, which found that the New Energy Efficient Home Credit incentivized the construction of energy efficient homes and was “estimated to spur the construction of 3 million homes in the next few years.” With those incentives no longer in place, fewer homes will be built, inventory will remain tight and new home prices will keep rising.
- It doesn’t help middle-class families. According to Chraibi, the “greatest barrier” for middle-income, working households isn’t just monthly payments — it’s it’s the upfront cost and lack of entry-level homes on the market. “Without targeted policies providing down-payment assistance or incentives for building for-purchase workforce housing, millions remain locked out of homeownership’s economic and stability benefits,” he said.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 6 Ways Trump’s ‘Big, Beautiful’ Bill Could Impact Housing — For Good and Bad
