Major Tax Legislation Brings Big Wins for Commercial Real Estate

Major Tax Legislation Brings Big Wins for Commercial Real Estate

Congress has officially passed the “One Big Beautiful Bill,” a sweeping legislative package that builds on the 2017 Tax Cuts and Jobs Act (TCJA) and introduces significant changes to the tax and entitlement landscape.

For commercial real estate professionals and investors, this bill delivers powerful incentives and long-term clarity. 

What Is the One Big Beautiful Bill? 

The newly enacted legislation—referred to as the OBBBA—includes: 

• Permanent extension of key TCJA provisions 

• A $4–5 trillion increase to the debt ceiling 

• Expanded tax breaks for families and businesses 

• Rollbacks of clean energy incentives 

• Stricter eligibility requirements for Medicaid and SNAP 

The bill touches everything from estate taxes and standard deductions to Opportunity Zones and bonus depreciation—making it one of the most impactful fiscal measures in recent memory. 

Key Provisions That Matter to CRE 

Here’s what stands out for commercial real estate: 

• 100% Bonus Depreciation Restored: Assets acquired and placed in service after January 19, 2025, are eligible for full first-year expensing. This reverses the previous phase-down and reintroduces a major incentive for capital investment. 

• Opportunity Zones Made Permanent: Long-term planning in designated areas just got easier. 

• Expanded QBI Deduction: The Qualified Business Income deduction is now permanently set at 20%. 

• Estate & Gift Tax Exemption Raised: New thresholds are $15M for individuals and $30M for joint filers. 

• SALT Deduction Cap Temporarily Increased: Joint filers under $500K income can now deduct up to $40K. 

What This Means for Investors 

At Latitude Commercial, we see this bill as a green light for increased activity across acquisitions, renovations, and tenant improvements. The return of full bonus depreciation is especially impactful—it boosts after-tax ROI and enhances financing outcomes. 

Cost Segregation: Now More Valuable Than Ever 

With 100% bonus depreciation back in play, cost segregation studies can be very useful. Identifying short-life assets (5, 7, or 15-year property components) allows investors to fully expense those items in year one which will create substantial tax savings. 

This strategy is ideal for: 

• New construction or acquisitions in 2025 and beyond 

• Renovated commercial buildings and tenant improvements 

• Investors aiming to reduce current-year federal income tax obligations 

Other Tax Incentives to Watch 

• Section 179D: Still available but set to be repealed for construction starting after June 30, 2026. 

• R&D Tax Credit: Remains in effect with a temporary reversal of Section 174 rules, allowing full deductibility of domestic R&D expenses. 

Summary of Key Outcomes For CRE 

Final Thoughts 

With this legislation now in place, commercial real estate professionals have a stable and favorable tax framework to work within. At Latitude Commercial, we’re ready to help our clients take full advantage—whether it’s through strategic acquisitions or long-term planning in Opportunity Zones. 

If you’d like to explore how these changes could impact your portfolio or upcoming projects, reach out to our team. We’re here to help you navigate the new landscape with confidence. 

Latitude Commercial provides commercial real estate services such as purchasing, leasing, landlord representation, tenant representation, and commercial property management throughout the states of Illinois and Indiana. To find out how we can help you, call us today at (219) 864-0200.

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