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ASHINGTON (May 12, 2025) – The House Ways and Means Committee has released the full draft text of their tax reform legislation, delivering significant wins for the real estate sector. The National Association of REALTORS' advocacy team successfully secured its top five tax priorities in the draft bill.
The bill includes an enhanced small business tax deduction, a strengthened state and local tax (SALT) deduction, and protections for the mortgage interest deduction (MID). It also makes the current lower individual tax rates permanent and increases the child tax credit. These measures could help increase homeownership access for more American families.
"This is a strong opening bid for our advocacy priorities," says NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn. "The bill preserves or strengthens provisions vital to housing affordability, including making the current lower income tax brackets permanent."
The draft legislation also triples the SALT deduction limits from $10,000 to $30,000 for households earning under $400,000. However, the bill does not eliminate the marriage penalty.
Key provisions in the draft include:
* Retaining and increasing the Qualified Business Income Deduction (QBI) from 20% to 23%
* Tripling the SALT deduction cap to $30,000
* Making individual tax rates permanent and indexed for inflation
* Preserving and making permanent the Mortgage Interest Deduction (MID)
* Protecting Section 1031 like-kind exchanges
The bill also includes additional positive tax provisions for the real estate economy, such as increasing the child tax credit to $2,500 and setting the permanent estate and gift tax threshold at $15 million.
While the early details are overwhelmingly positive, McGahn cautions that the bill will continue to evolve as it moves through the committee process. NAR will engage directly with congressional leadership and policymakers to ensure that housing affordability and support for small businesses remain top priorities in these negotiations.
