Now Signed Into Law, Here's What the One Big Beautiful Bill Means for Home Builders

After a lengthy deliberation by the House of Representatives, the One Big Beautiful Bill made its way to President Trump’s desk for his signature on July 4
July 8, 2025
2 min read

Congress recently passed the One Big Beautiful Bill Act, successfully getting a massive piece of legislation to President Trump to sign by his July 4 deadline, which he did at the White House that day. The bill narrowly passed the U.S. Senate last week before making its way back to the U.S. House of Representatives for a final vote. According to the National Association of Home Builders (NAHB), the bill will bring forth broad tax and domestic policy implications for home building businesses.

In a recent blog post, NAHB outlines wins for builders in the new law, including:

  • Permanently increasing the estate tax exemption to $15 million and indexing it for inflation;

  • Expanding the Low-Income Housing Tax Credit, increasing 9% credit allocations by 12% and reducing the 4% bond test to 25%;

  • Extending the Section 460(e) Completed Contract accounting rule to condominiums so that taxes are applied when a home is sold, not during construction; and

  • Making the current mortgage interest deduction rules permanent and allowing deductions for mortgage insurance premiums.

The House-passed bill would have permanently increased the controversial limit on the state and local tax (SALT) deduction for individuals from the current $10,000 cap to $40,000. NAHB supported the House position on SALT, which was one of the final elements negotiated in the House bill that ensured its passage.

The Senate viewed the House proposal on SALT with skepticism, but also recognized the careful political balance needed to pass the bill in the House. Several senators sought to unwind the House SALT deal, which threatened the viability of the entire bill, leading to high-level negotiations between the House, Senate and Treasury Secretary Scott Bessent.

The final bill approved by the Senate ultimately agreed to follow the House and increase the SALT cap to $40,000, but only on a temporary basis. The increase will take effect for 2025 and remain in force through 2029, with a 1% inflation adjustment after 2025. As with the House-passed bill, the Senate bill phases down the cap increase for households with incomes above $500,000, but not below a $10,000 cap. The SALT cap would revert back to $10,000 in 2030, which means debate over limiting SALT deductions will continue in the coming years.

 

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