If you’re a real estate investor, here’s some good news coming out of Washington: The U.S. House of Representatives recently passed a budget resolution that could bring back full 100% bonus depreciation—a major tax break that helped investors save big before it started phasing out last year.
While nothing is set in stone yet, this is a step in the right direction. If the provision makes it through the Senate and into law, it could mean big opportunities for investors looking to maximize tax savings and improve cash flow.
What Is 100% Bonus Depreciation, and Why Does It Matter?
Back in 2017, the Tax Cuts and Jobs Act (TCJA) introduced 100% bonus depreciation, allowing businesses—including real estate investors—to immediately deduct the full cost of qualifying property improvements in the year they were put into service.
That meant instead of spreading deductions over multiple years, investors could write off big expenses right away, improving cash flow and reducing taxable income. Eligible assets included things like:
✅ Certain leasehold improvements
✅ HVAC systems
✅ Roofing
✅ Security systems
This was a game-changer for real estate investors. But in 2023, the provision started phasing out—dropping to 80% that year, 60% in 2024, and set to keep decreasing until it’s completely gone by 2027.
The House budget resolution aims to bring back the full 100% benefit, and if that happens, it could make property ownership and upgrades a lot more attractive financially.
Why the House Budget Vote Matters
While the House vote doesn’t guarantee anything yet, it’s a sign that lawmakers are looking at tax incentives that benefit businesses and investors. If passed, this could be included in upcoming tax legislation that would directly impact real estate investors.
And let’s be real—tax laws are constantly changing. Staying ahead of these shifts can make a huge difference in how you strategize your investments.
How Real Estate Investors Could Benefit
If 100% bonus depreciation comes back, here’s what it could mean for investors:
💰 Immediate Tax Savings – Write off the full cost of eligible property improvements in the first year, reducing taxable income.
📈 Better Cash Flow – With a lower tax bill, you can reinvest savings into new properties, renovations, or other investments.
🏗 More Incentive to Upgrade Properties – Landlords and developers might be more willing to make improvements, leading to higher property values and potential rent increases.
🏢 More Market Activity – If this tax break is reinstated, we could see a surge in property purchases and renovations as investors take advantage of the savings.
What’s Next?
The House vote is just one step in the process. Now, all eyes are on the Senate, where the final version of the budget (and any tax incentives) will be debated. With ongoing discussions about government spending and tax policy, this could take time.
For now, here’s what you can do:
✔ Stay informed – Keep an eye on legislative updates and be ready to act if the provision is reinstated.
✔ Talk to your CPA or tax advisor – If this tax break comes back, a solid strategy could help you maximize savings.
✔ Plan ahead – If you’re thinking about property improvements, it might make sense to time them strategically.
Final Thoughts
If the 100% bonus depreciation provision makes a comeback, it could be a huge win for real estate investors. But tax laws change fast, and the best investors are the ones who stay ahead of the game.
Keep an eye on what happens next—and be ready to take advantage of any opportunities that come your way.
