How the Senate's Version of One Big Beautiful Bill Act Impacts Home Builders

This week, the U.S. Senate passed the One Big Beautiful Bill Act (H.R. 1), which includes broad tax and domestic policy changes that could have impacts for businesses across industries—including for home builders. The U.S. House of Representatives is expected to vote on the bill soon, aiming to get it to President Trump by his July 4 deadline.

In a recent blog post, the National Association of Home Builders outlined several housing industry wins that could come from the bill, including:

• The estate tax exemption will rise to $15 million, be permanent, and adjust with inflation;
• The current mortgage interest deduction rules will be preserved, with mortgage insurance premiums allowed to be deducted as well;
• The Low-Income Housing Tax Credit will be expanded, with more credit allocations and relaxed bond requirements to help bond-constrained states;
• Section 179 expensing limits will be increased, benefiting small businesses;
• The Section 460(e) partial completed method exemption will ensure that homes and now condos aren't taxed until completed and sold; and
• The State and Local Tax (SALT) deduction cap will temporarily rise to $40,000 starting in 2025, with inflation adjustments after that; among other facets of the bill.

NAHB’s only concern with H.R. 1 is the early termination of the energy tax credits, particularly the Section 45L New Energy Efficient Home Credit, the Section 25D Residential Clean Energy Credit, and the Section 48E Clean Electricity Investment Credit.

The Section 45L credit will be eliminated after June 30, 2026, and the Section 25D credit will expire at the end of 2025. The Section 48E credit will be eliminated for eligible property that is not placed in service by Dec. 31, 2027. However, on a positive note, the Senate heeded NAHB’s recommendation to allow solar leasing arrangements to continue to benefit from the 48E tax credit. These arrangements eliminate the upfront costs of installing a solar system on a home and allow homeowners to benefit from reduced utility costs.