Senate GOP Tax Package Preserves Key Real Estate Incentives

Senate Republicans passed a sweeping tax and spending bill that preserves and expands several housing-related provisions.

July 1, 2025

Nina Dale

Senate Republicans approved a substitute version of H.R. 1 by a 51-50 vote, with Vice President J.D. Vance casting the tie-breaker.
The legislation includes numerous permanent or enhanced tax benefits championed by the Mortgage Bankers Association, including full expensing, enhanced LIHTC, and restored mortgage insurance deductibility.
Proposals targeting passthrough SALT deductions and Section 899 were successfully eliminated through industry advocacy.
The House must now consider and reconcile the Senate version before President Trump’s July 4 signing deadline.

Key Takeaways

A Narrow but Consequential Vote

After days of internal GOP wrangling, the Senate passed its version of H.R. 1, a comprehensive bill addressing taxes, spending, and national priorities, including energy, defense, and border security. According to the Mortgage Bankers Association (MBA), the $5 trillion debt limit increase and extensive tax code revisions make this one of the most consequential legislative efforts of the year.

Big Wins for Housing and CRE Finance

The Mortgage Bankers Association (MBA) played a key role in shaping the bill’s housing-related provisions. “MBA is pleased that the Senate’s version of the bill maintains, and in several cases enhances, numerous pro-housing and economic development tax provisions,” said MBA President and CEO Bob Broeksmit, CMB.

Key provisions include:

Permanent individual tax rate structure and standard deduction extension.
Permanent 20% QBI deduction under Section 199A, with an expanded phase-in range.
Restored full expensing and 100% bonus depreciation for qualifying property.
$40K SALT cap (temporarily raised), subject to a $500K income threshold.
$750K mortgage interest deduction cap, including HELOC eligibility.
Permanent deductibility of mortgage insurance premiums, subject to income limits.
Major enhancements to LIHTC, including a permanent 12% increase in 9% credits and a permanent reduction of the bond test from 50% to 25%.
Permanent renewal of Opportunity Zones, with added program reforms.
Permanent reinstatement of EBITDA for calculating business interest deductions.

Industry Advocacy Pays Off

Two controversial provisions—Section 899 and limits on passthrough SALT deductions—were removed from the Senate bill, avoiding negative tax consequences for the real estate finance sector. The bill also preserves critical tax treatments, including:

MSR deferral,
Section 1031 like-kind exchanges,
Carried interest,
Capital gains rates.

Outlook: July 4 Deadline Looms

The House is reconvening to review the Senate-passed version. To become law, both chambers must pass identical versions before President Trump can sign the bill—potentially before the July 4 holiday.

The MBA has pledged continued advocacy to ensure housing and commercial real estate interests remain protected in the final legislative package.