How the National Association of REALTORS®’ advocacy on the Qualified Business Income Deduction and other tax provisions benefits real estate professionals.
When President Trump signed the One Big Beautiful Bill Act (H.R.1) on July 4, 2025, the event marked a pivotal moment for real estate professionals and small-business owners nationwide. After months of uncertainty, the final tax package extended and strengthened several provisions that form the backbone of how NAR members operate their businesses. Chief among those provisions: the permanent extension of the Qualified Business Income (QBI) deduction.
Value of the Qualified Business Income Deduction
For many independent contractors and small real estate firms, the QBI deduction is a critical provision that helps keep their businesses viable, supports reinvestment and offsets rising costs in an already challenging market.
Originally enacted as part of the Tax Cuts and Jobs Act of 2017, the QBI deduction allows eligible pass-through businesses to deduct up to 20% of their qualified business income.
Also known as a Sec. 199A deduction for its place in the federal tax code, the QBI was scheduled to expire at the end of 2025, threatening a substantial tax increase on small businesses across the entire economy and the real estate sector. H.R. 1 resolved that uncertainty by making the QBI deduction permanent, an outcome NAR identified as a top priority throughout the legislative process. (See five hypothetical examples QBI use by real estate professionals.)
A temporary deduction forces conservative planning, discourages long-term investment and injects unnecessary volatility into business decisions. By locking in a permanent QBI deduction, Congress provided real estate professionals with the predictability they need to hire staff, invest in technology, expand services and weather market cycles.
Stopping Business SALT Proposal in Its Tracks
At the same time, H.R.1 temporarily addressed a long-standing concern for owners of real estate: the tax treatment of state and local tax (SALT) payments. The legislation quadrupled the amount that homeowners can deduct from their federal tax liability—increasing the limit from $10,000 to $40,000 (but only through 2029 unless Congress extends this provision or makes it permanent).
While this alleviates problem many individual taxpayers had with the SALT deduction cap—which has been a persistent frustration since it was implemented in 2017—a new potential threat for real estate investors and businesses emerged during the negotiations for last year’s tax reform. Some legislators considered the idea of placing a limit on the deduction of state and local taxes on business and investors. This so-called “business SALT” cap could have been devastating to real estate–related businesses, whose property tax payments are often higher than their expenses for salaries and wages. Thanks to a last-minute education campaign to lawmakers by NAR’s lobbyists, the final bill omitted any deduction limits for business SALT deductions, removing a potential major headache for landlords, developers and real property–owning entities.
Preserving Your Use of 1031s
Section 1031 like-kind exchanges—enabling investors to defer capital gains when exchanging one investment property for another—are a cornerstone of real estate investment and emerged intact after enactment of the OBBBA. While not explicitly mentioned during the OBBBA deliberations, 1031 exchanges have faced repeated threats in recent years, including proposals to cap or even repeal them. NAR has consistently opposed those efforts, arguing that 1031 exchanges are essential to maintaining market liquidity, facilitating property reinvestment and supporting the supply of rental housing.
As with the QBI, the certainty that 1031 tax provisions remain in place supports long-term planning, allows capital to move efficiently and helps sustain investment in communities nationwide.
A Lobbying Organization That Never Quits
NAR’s advocacy played a decisive role in shaping these outcomes. Working in close coordination with state and local associations and industry partners, NAR pushed for permanence of the QBI deduction, clarity on business SALT treatment and the preservation of 1031 exchanges. Through direct engagement with lawmakers, formal comments and coalition advocacy, the association emphasized that these provisions are not loopholes—but foundational tools that support small businesses, job creation and housing supply.
For you and your clients, the implications are significant. The permanence of the QBI deduction reduces the risk of sudden tax increases and allows businesses to plan with confidence. Investors who delayed transactions amid fears of changes to 1031 exchanges can move forward knowing that the rules remain stable. And business owners can better forecast cash flow and deal structures with assurance that core tax treatments were protected.
“The One Big Beautiful Bill delivered meaningful certainty for real estate professionals, particularly through the permanent QBI deduction,” says Evan Liddiard, NAR director of federal tax policy. “But tax policy is an ongoing process, and sustained advocacy will remain essential to protect these provisions over time.”
For now, NAR members can take stock of a major policy win—one that recognizes the central role small businesses play in the real estate economy and reinforces NAR’s commitment to protecting the tools that keep capital moving and communities growing.
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