Unpacking The One Big Beautiful Bill Act
What It Means For Commercial Developers
President Donald Trump Signing The One Big Beautiful Bill Act on July 4th, 2025
By now, everyone has encountered the One Big Beautiful Bill Act (OBBBA) in one way or another—and for good reason. It’s one of the most comprehensive pieces of federal legislation in years, touching nearly every corner of the economy, including commercial real estate.
While most headlines focus on politics or broad economic impacts, the real story for developers and property owners is in the details, the parts that change how projects are financed, structured, and built.
Here’s a breakdown of what the OBBBA says and what that means for you as well as things to watch out for and Action Items.
Bonus Depreciation Returns — and Stays
What the Bill says:
The Big Beautiful Bill brings back 100% bonus depreciation for qualifying property improvements, equipment, and systems — and makes it effectively permanent. Instead of spreading those costs over decades, you can now write them off in the first year.
What that means for you:
That’s an immediate boost to your cash flow. You can deduct the full cost of major improvements (think HVAC, lighting, tenant build-outs, and certain site work) right away. Projects that once took years to “pay back” on paper can now look profitable much sooner. For developers, this makes it easier to justify reinvestment in older properties or to upgrade existing portfolios without waiting for long-term tax recovery.
Easier Interest Deductions
What the Bill says:
The bill loosens the limits on how much interest businesses can deduct on loans used to finance projects. Previously, developers with higher debt loads faced caps on how much of their interest could offset taxable income. Those limits just got raised.
What that means for you:
Borrowing becomes more attractive again. With more interest eligible for deduction, your cost of financing effectively drops. For highly leveraged developments — especially office, warehouse, or industrial builds — that can make or break feasibility. It’s also good news for investors who prefer structured debt financing.
1031 Exchanges Survive the Chop
What the bill says:
Despite speculation to the contrary, the Big Beautiful Bill keeps the long-standing 1031 like-kind exchange intact. You can still sell one property and reinvest the proceeds in another without immediately paying capital gains tax.
What that means for you:
More liquidity, less tax drag. Investors can keep their capital moving, and developers can tap into rollover equity for new projects. It’s a green light to keep growing portfolios without being penalized for reinvestment.
Affordable Housing Gets a Boost
What the bill says:
The Low-Income Housing Tax Credit (LIHTC) program is expanded, and the threshold for bond-financed projects to qualify is reduced. Translation: more affordable housing projects can access federal tax credits.
What that means for you:
Mixed-use and multifamily developers should take note. If your project includes an affordable component, you may now qualify for credits that significantly improve deal economics. Even commercial developers should consider whether integrating residential or workforce housing could open the door to these incentives.
Opportunity Zones Extended and Expanded
What the bill says:
The Opportunity Zone program, which rewards investment in economically distressed areas, is extended and slightly expanded — especially to include more rural regions.
What that means for you:
If you’ve been eyeing properties in redevelopment zones or outer markets, now’s the time. The extended program gives investors confidence to commit to long-term OZ projects, and developers can leverage those investments to finance ground-up or repositioning work.
Some Green Incentives Get Trimmed
What the bill says:
The bill scales back certain federal incentives for energy-efficient commercial building improvements, including some credits and deductions for renewable or sustainable materials.
What that means for you:
Developers focused on sustainability will need to adjust their math. Projects that previously relied on federal energy credits may need to look for state or utility-backed programs instead. It’s still worth going green — just make sure to factor in reduced federal support when budgeting.
SALT Deduction Cap Raised
What the bill says:
The state and local tax (SALT) deduction cap increases from $10,000 to $40,000, at least temporarily.
What that means for you:
Investors and developers in high-tax states may see relief at the personal income tax level, freeing up more capital for reinvestment or operational flexibility. It’s not a game-changer, but it helps.
Things to Watch Out For
Even with all these opportunities, there are some critical caveats worth keeping in mind:
Eligibility Limits
Not every improvement qualifies for bonus depreciation or accelerated expensing.
Action: Have a tax professional or cost segregation specialist review your project scope early.
Recapture Rules
Selling or repurposing an asset too soon may trigger tax payback.
Action: Plan your hold period strategically and structure exit plans accordingly.
Interest Rate Volatility
Stimulus measures could contribute to rising rates over time.
Action: Lock in favorable financing terms where possible.
Policy Risk
“Permanent” provisions can always be amended later.
Action: Build flexibility into your pro formas and partnership agreements.
Reduced Green Incentives
Some projects may lose previously available energy credits.
Action: Explore alternative funding or local sustainability programs.
Action Items for Developers
Here’s how to turn these updates into an advantage:
Revisit Your Pipeline. Some projects that didn’t pencil before might now make sense under the new tax landscape.
Run Updated Financial Models. Adjust assumptions for depreciation, interest deductions, and available credits.
Conduct Cost Segregation Studies. Identify which project elements qualify for accelerated depreciation.
Engage Your CPA Early. Timing matters — some provisions depend on when construction starts or assets are placed in service.
Reassess Capital Strategy. Evaluate debt-to-equity ratios with new interest rules in mind.
Stay Informed. IRS guidance and Treasury updates will continue to clarify how these changes apply to real-world projects.
The Takeaway
The Big Beautiful Bill reshapes the financial landscape for commercial development. Faster write-offs, more flexible financing, and preserved investment incentives create opportunities for developers ready to act — but attention to eligibility, timing, and project structure is key. Those who understand and leverage these changes early will have a clear advantage in the market.
Why Brandise Construction is Your Advantage
With over five decades of experience and one of Nevada’s first unlimited licenses, Brandise Construction isn’t just building structures — we’re building success for our clients. From complex industrial renovations to full-scale commercial developments, our team combines deep industry knowledge, unmatched project management, and a commitment to quality that ensures every project thrives in today’s evolving market.
If you’re planning a commercial, office, or industrial project, now is the time to leverage the opportunities in the Big Beautiful Bill — and Brandise Construction is the partner who can help you turn strategy into results.
