The U.S. House of Representatives passed a long-anticipated tax reform package, the One Big Beautiful Bill Act, early Thursday morning that included several major victories for Real Estate.
The bill permanently increases the qualified business income deduction from 20% to 23%
It also quadruples the state and local tax deduction cap from $10,000 to $40,000
The bill makes the current individual tax rates permanent and indexes them for inflation
In addition, it preserves and makes permanent the mortgage interest deduction
legislation protects Section 1031 like-kind exchanges and leaves business SALT deductions intact
The bill also includes other Real Estate related items including: Low-income housing tax credit, estate tax certainty, renewed Opportunity Zone incentives, and the creation of tax-advantaged child investment accounts that can be used for qualified expenses of the beneficiary such as first-time home purchases.
The bill will proceed to the Senate. The biggest obstacle may be the threatened opposition from Senate conservatives who say the bill doesn’t do nearly enough to cut future deficits, which are projected to exceed $2 trillion annually for the next two years.
Source: Florida REALTORS
Mortgage Rates
Average 6.86%
Mortgage rates inched up this week but continue to remain lower than one year ago. With more inventory for buyers to choose from than the last few years, purchase application activity continues to hold up.
