Posted by on 07.24.25
1. 100% Bonus Depreciation is Fully Restored
Bonus depreciation has been an extremely valuable tax strategy for real estate inves tors and business owners. After gradually phasing down over the last few years, it’s now back in full force.
With 100% bonus depreciation fully restored starting January 19, 2025 through January 1, 2030, real estate investors and business owners have a powerful opportunity to supercharge their tax strategy, both going forward and looking back.
For the current year, that means any qualifying personal property (items with a useful depreciable life shorter than 20-years) placed in service after that January date can be fully deducted in the same year, unlocking significant cash flow. Cost Segregation super charges real estate acquisitions by dissection a building to separate the personal prop erty from the building to capture these huge deductions. This can be applied to new purchases and ground-up builds, but also capital improvements and renovations like interior upgrades, FF&E, and land improvements.
For properties acquired or newly placed in service before January 19, 2025, the previous phase down of Bonus Depreciation remains in force as follows:
If you paused or delayed projects during the phase-down years, now is the time to act. With 100% bonus depreciation fully restored, this change creates a window of opportu nity for at least another 5 years.
What It Means: This change brings back the ability to deduct the full cost of eligible property in the year it's placed in service, greatly improving cash flow and encouraging reinvestment.
Eligible improvements include:
It also renews the full benefit of cost segregation studies, which are especially important for real estate investors looking to accelerate depreciation.
2. 100% Sunsetting Section 179D Energy-Efficient Commercial Building Deduction
Section 179D rewards those who improve building performance through efficient HVAC, lighting, and envelope systems. The bill keeps the incentive in place but only for projects that begin construction before July 1, 2026.
Key Highlights:
Why It Matters:
This incentive stays intact for now under the bill and continues to allow architects, engi neers, and other designers to claim the deduction on government or nonprofit build ings. For large commercial and multifamily projects, these deductions can total in the hundreds of thousands or more.
For those planning new construction or major renovations, acting early is essential to ensure these benefits are built into your project timeline and fully realized. Architects, engineers, and design firms can also continue claiming these deductions on qualifying government and nonprofit projects, making this one of the few direct federal incentives available to them—but only for a limited time.
The bottom line: being proactive now means maximizing savings and staying ahead in a market where energy efficiency and sustainability are no longer optional, they're expected.
3. Sunsetting Section 45L – Energy-Efficient Home Credit
The 45L credit has been a valuable incentive for developers and builders focused on energy-efficient residential properties. This bill ensures it continues in its enhanced form but only for homes or units sold or leased up before July 1,2026.
Credit Details for home/units sold or leased up after 2022:
Why It Matters:
The 45L credit has been a valuable incentive for developers and builders focused on energy-efficient residential properties. This bill ensures it continues in its enhanced form— but only for homes or units sold or leased up before July 1,2026, when the credit is officially set to expire. Now is the time to take advantage of it while it's still available.
