The Landlord Lens - Trump's Big Beautiful Bill: What Does It Mean For Landlords?

Episode Date: July 11, 2025

What exactly is in Trump’s “Big Beautiful Bill,” and why should landlords care? In this video, we break down what the proposed legislation could mean for property owners, from changes to rental assistance to tax incentives. Get a clear, straightforward look at how this bill might affect your business, your tenants, and the rental market overall. Stay informed so you can plan ahead and make the right decisions for your properties. #onebigbeautifulbill 

The big beautiful bill is the largest spending bill passed by Congress in years. It's a giant package, and some of these changes really matter and should impact your planning for the next year. We're going to focus just on how this bill might impact DIY landlords. Hey, everybody. Welcome to another episode of Landlord Lens. I'm joined, as always, by our favorite co-host, Shamus Nally. How are you doing, Shamus? John, I'm doing good, and I'm especially excited today to talk about a spending bill. spending bill. There was a spending bill. Some people call it a big beautiful bill. Some people are

calling it. Excuse me. Somebody had to do it. Anyway, the big beautiful bill is the largest spending bill passed by Congress in years. What we're going to do, John, is we're going to cast aside any cynicism around the bill specifically and its increase in spending. And we're going to focus just on how this bill might impact DIY landlords. That's right. Yeah. We're going to only focus in on the items in here that affect the game on the field for the do-it-yourself landlord. And there's a lot in here, actually. So just cleared Congress was signed on July 4th. America.

America. It's a giant package. It's got lots of changes through the reconciliation process. And some of these changes really matter and should impact your planning for the next year. So where should we start, Seamus? Well, I'd like to start with one of the biggest wins, which is around the bonus depreciation. Oh yeah, that one's huge because what, what, how does, how did depreciation work before for rental properties? So typically you invest in your rental property doing projects, whether that's renovation, um, buying new appliances, things like that. And it depreciates over 27 and a half years.

27 and a half years. Don't ask me why. I don't understand it. I've always assumed it's because of leap years. That's your typical depreciation schedule, right? So you put that money out there, but you don't get that tax right off immediately. Well, that has all changed as of the signing of this bill, and it actually is retroactive to any property and project you worked on as of January 19, 2025. Awesome. Okay. So after January 19th, which feels like a strange date to pick, now you can basically do a bonus depreciation up front? Yes. And 100%.

So previously, you could do up to 40. percent up front. Now that's moved to 100 percent, which is really incredible. And I think it's important to understand how our landlords might plan their own tax liability using an example here. So let's say you're like me and you've actually decided to sell a property this year or a couple properties this year and you're getting a nice hefty gains in that property. Well, you don't want to pay taxes on all that, right? Like all of us, we're trying to reduce the amount of money we hand to the government. And so you can actually counterbalance the gains you had off that property with a renovation project and you can write it down all at once,

right? And you could actually, if you can time it correctly and scale it correctly, you might actually build to reduce your tax liability to zero while improving and increasing the value of another rental that you own. Gotcha. Okay. Now, if I didn't have Would this change anything if I didn't have a windfall to spend quickly? It doesn't in that you're just going to take a bigger loss, right? So you're still going to counter the rental income that you may have coming in and make sure that you end the year in the red, which is what you want from a rental property standpoint in most cases.

Gotcha. Okay. So that seems really big. And it's going to unlock a lot of renovations for rental properties across the country, it sounds like. Yeah, it's huge, especially if you're doing, the burr method, right, where you're buying and renovating a property, you might be looking out and saying, okay, interest rates are high.

The housing market seems a little shifty. Some places, prices are dropping. Sometimes places, prices are still going up. Should I be active in the market? The opportunity to go ahead, buy and renovate and then write that all off might be worth it to push yourself over the edge and actually engage in the market today. Sweet. Okay, that's awesome.

So that's a big win. let's talk about the deduction cap related to the state income taxes. Yes, salt. Salt. State and local tax. So if you live in a state

or you're paying taxes and a state because maybe you have rental properties in a state with a high income tax, your itemized deduction list has gone from an allotment of $10,000 all the way up to $40,000. Oh, awesome. So if suddenly if I'm paying $25,000,

every year to my state and local, and I can only write off 10% of that. Now I can wrap that whole thing. Exactly. Yep. You're still going to want to work with a CPA to make sure you have qualified deductions, but for someone like me who lives and owns rental in Colorado and in New York, this is really exciting to increase the amount that I can deduct on my New York state income tax. Awesome.

Okay. Definitely talk to your CPA, though, because there are some phase outs depending on if you have really high income. So the higher your income after 500,000, this limit starts to lower. Yes. And so far, this has been raised through 2029. So this is not the only year. Also, they had to go into effect for tax years after 2024, meaning this year, 2025,

it's going to be the first year that supplies to. Yep. And unlike a lot of these other provisions, which we'll call out were relevant, this one is not permanent. It has an end date in 2030. Yeah. So let's set a. event on our calendars in 2029. Let's talk about whether or not Congress is going to pass it to

extend past 2030. Ooh, juicy. That sounds like it's going to be a really fun episode. I'm sure I'll know you. No, no. Okay. So we just talked about bonus appreciation, but there's this other thing in there related to Section 179 expensing expansion. Talk a little bit about that. I got to be honest. This threw me a little bit for a loop because it feels like the little brother to the bonus depreciation. So it's very similar and that it's regular. how much you can write off immediately and upfront for expenses. But from what I can tell, the bonus depreciation kind of supersedes this. And in most cases, you're going to be able to write off actually 100%

and not run into the expense limits that are captured in 179. But this is why you should talk to a tax professional and not just listen to a YouTube video. The other piece of this that's kind of interesting and will not just affect the tax situation of landlords, but also affect the housing market are all these incentive changes for development and for affordable housing. Yes. And affordable housing is something that the entire nation has kind of been screaming about, right? And so how do you get more affordable homes created? There's a couple of paths which this bill has tried to touch on. One is increasing the tax credits for low-income housing. The other is to both make the opportunity.

Zone concept permanent, as well as create a cycle where opportunity zones are selected on an annual basis within each state. But what is an opportunity zone? Is that a legal term? So, Opportunity Zones are areas that are identified by the state as places where they want to increase the amount of housing availability. Okay. So they're typically, they're traditionally in places that have either suffered from, I would

say blight, where there's not great living conditions in those areas, or they could be rural locations where they just need more housing in general. And I read tribal also. Yes, tribal. And so the opportunity zones have been created to create a really good incentive for investors to take capital gains, windfalls that they have from other projects, invest them into opportunity zones with the idea that after 10 years, those capital gains, the taxes are actually forgiven.

Oh, wow. Okay. Which is fantastic. And it's something that I've looked at myself and we actually looked at a project. The challenge or concern I had previously was the opportunity zones were not permanent. And so my concern was you need to have your investment for 10 years to really reap the full benefit of an opportunity zone. And my concern was that with administrations changing every four years and things changing rapidly, I might get to eight years and this incentive actually disappears. right? Yeah. The new big, beautiful tax bill has extended those opportunity zones making that permanent. Permanent. So it should create more certainty for investors to invest in those areas,

knowing that they're going to reap the benefit that they're thinking ahead of time. Awesome. Okay, so this concept isn't new, but ideally by making them permanent, it'll mitigate some of the risk investors feel and more money will go into these opportunity zones. Yeah, absolutely. And just creating the focus on these opportunities zones. is really beneficial in the places that are being selected because these are places that do need new housing and will greatly benefit from additional investment. So what I would do is I'd contact your local housing authorities and get in touch with your local city government and understand what opportunity zones may be available out there for you to invest in, especially if you

have a windfall and of income coming, whether that is from real estate or from another source. and you want to avoid paying the capital gains on there. Cool. As far as downsides and tradeoffs, this is kind of a short section. The downsides and tradeoffs, we couldn't find many that directly impact them. The closest we got was green incentives, right? Yeah, which may be playing a role

in how you think about the renovations, right, and projects you take on and the expense for them. It's definitely something that from a multifamily standpoint and build to rent, we're hearing a little bit of blowback. There's concerns there that these incentives disappearing is going to make that housing more expensive or those projects less desirable.

But from a DIY perspective, I'm having a hard time kind of threading that needle as to how it's likely hurting a lot of DIY landlords out there. But I might be missing something. So certainly if you're sitting here saying, what are you talking about? This completely screwed, you know, the project that I was working on,

please let us know in the comments and help educate us. So if I'm going to summarize some of the things I should expect to understand as a DIY landlord, first, probably expect some relief in my market if my market's impacted by the affordable housing stuff and also building booms in rural areas. Higher salt cap and might make expensive coastal markets more attractive, right, because those, that tax benefit. So keep an eye out for prices and cap rates adjusting in those markets. And then financing for green upgrades may get more.

expensive as credits vanish, but it's unclear exactly what effect that will have on DIY language generally. Yeah, in light of the passing of this bill, if you have someone that helps you prepare your taxes, right, if you have a CPA, reach out to them now. Don't wait until the end of this year to learn how it may have impacted your tax situation. I think it is very worth you having that conversation now to help you plan for the next six months. Let's say you don't have a CPAs are also usually happy to do a call consultation. So now it would be a time to call a couple. Maybe you feel perfectly confident filing your own taxes. Wonderful. You still might get some free education from a 30 minute call that doesn't cost you anything to a CPA to understand

how they see the inputs of this bill and maybe local bills on your real estate portfolio. So there you have it. There are the elements of the big beautiful bill we found that impact DIY landlords. Well, John, if I have to say so myself, I think we nailed it. But if you're sitting there thinking that we completely miss something, please leave it in the comments. And as always, like and subscribe. It helps us grow the channel. Thanks, everybody. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice. Landlord better from anywhere for free at turbotenant.com.