How the “Big Beautiful Bill” Supercharges Multifamily Investing in 2025
If you own or invest in multifamily real estate, the recently passed “Big Beautiful Bill” (BBB) could significantly boost your bottom line. Whether you operate market-rate assets or build affordable housing, the bill introduces powerful tax breaks and development incentives that reshape the economics of multifamily ownership.
In this post, we break down the top six ways the BBB benefits multifamily owners, developers, and investors—with a focus on long-term tax strategy, capital preservation, and community-focused growth.
1. 100% Bonus Depreciation Is Back
After phasing out in recent years, full 100% bonus depreciation is restored. This allows multifamily owners to immediately expense a large portion of qualified property improvements, greatly enhancing year-one cash flow and reducing taxable income.
2. Major LIHTC Expansion for Affordable Housing
Affordable housing developers score a major win with the largest Low-Income Housing Tax Credit (LIHTC) expansion in decades:
- 4% LIHTC deals become more viable, thanks to a reduction in the private bond financing requirement from 50% to 25%
- 9% LIHTC allocations receive a permanent 12.5% increase, enabling more projects to move forward with stronger funding support
These changes are expected to double the number of supported affordable housing projects, particularly in high-need areas.
3. Rental Assistance and Housing Vouchers
The BBB increases federal funding for rental subsidies and housing voucher programs, helping stabilize rents and reduce default risk for landlords. This is especially valuable for Class B and C owners serving working-class tenants.
4. Opportunity Zones 2.0: A Second Wave of OZ Projects
Opportunity Zones get a powerful reboot:
- New designations can be made in rural and high-poverty communities
- Projects in these zones receive a 30% bonus to the tax basis, encouraging capital to flow into underserved markets
This expansion gives investors fresh OZ investment windows, enabling deferred or eliminated capital gains in qualifying deals.
5. 1031 Exchanges and Capital Gains Tax Rates Are Preserved
Despite prior political pressure, the BBB fully preserves 1031 like-kind exchanges, ensuring continued deferral of capital gains taxes for investors who reposition or sell properties.
Even better: long-term capital gains tax rates remain capped at approximately 20 percent, giving sellers clarity and confidence in their exit strategy.
6. New Incentives for Green Building and Energy Efficiency
Multifamily developers and owners can now take advantage of enhanced green tax credits tied to solar, energy-efficient systems, and low-carbon materials. These incentives reduce development costs while future-proofing assets against rising environmental standards.
Summary
The Big Beautiful Bill isn’t just political fanfare—it’s a strategic opportunity for multifamily investors. Whether you're repositioning assets, launching new developments, or seeking tax efficiency, the BBB offers tools to optimize your returns while making a community impact.
If you'd like to explore how these changes can apply to your portfolio—or need help identifying your next 1031 exchange or LIHTC investment—Excel Commercial Realty is here to guide you.
Kynan Pang, CCIM (B)
RB-23513
808-225-8776