While many potential buyers believe they need a down payment of 20% for their first home purchase, the typical down payment for first-time buyers has ranged from 6% to 9%, dating back to 2018.
WASHINGTON—The U.S. Senate on Tuesday passed sweeping tax reform legislation—packed with major real estate provisions championed by the National Association of Realtors—advancing the measure toward final approval.
The U.S. House of Representatives passed its version of the One Big Beautiful Bill on May 22. It is expected to take up and approve the Senate-amended version in the coming days, sending the legislation to the president’s desk for signature shortly thereafter.
NAR successfully secured its top five priorities in the final package, alongside several other provisions that support homeownership and strengthen the real estate economy.
“We’ve worked for months to educate Congress through original NAR research, analysis and polling to demonstrate the value and broad support for the many real estate provisions in this bill,” says NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn. “Congressional leaders were receptive to our message. Our team had many conversations with lawmakers, and they thanked us for our public support and for providing the data they needed to support these provisions.”
NAR remained at the negotiating table through the final hours. “We were invited to the White House on Friday—just days before the final vote—to continue advocating for our members and consumers as the Senate version took shape,” McGahn says. “The administration and Congress respect the voice of our members and the roles they play as leaders in their communities. We are an army of advocates living and working in every ZIP code in America with a unique insight into the state of the economy.”
NAR’s Top Five Real Estate Wins
The bill includes NAR’s five key priorities:
A permanent extension of lower individual tax rates
An enhanced and permanent qualified business income deduction (Section 199A)
A temporary (five-year) quadrupling of the state and local tax (SALT) deduction cap, beginning in 2025
Protection for business SALT deductions and 1031 like-kind exchanges
A permanent extension of the mortgage interest deduction.
“These provisions form the backbone of the real estate economy—from supporting first-time and first-generation buyers to strengthening investment in housing supply and protecting existing homeowners,” McGahn says. “Real estate makes up nearly one-fifth of the entire U.S. economy, and we made sure policymakers understood that homeownership is the essential component to building wealth and a strong, prosperous middle class.”
Additional Wins for the Real Estate Economy
Several other provisions in the bill championed by NAR add to its positive impact on the real estate sector:
Low-Income Housing Tax Credit (LIHTC): Key provisions from the LIHTC Improvement Act are included on a permanent basis to support affordable housing development.
Child Tax Credit Increased to $2,200: Permanently raises the credit, with inflation indexing. This provision could ease housing affordability for families.
Permanent Estate and Gift Tax Threshold Set at $15 Million (Inflation-Adjusted): Prevents a sharp drop in exemption levels and supports generational wealth transfer.
No Increase to the Top Individual Tax Rate: The proposed 39.6% rate was removed from the bill.
Restoration of Key Business Provisions:
Full expensing of research and development
Bonus depreciation
Fixes to the interest expense deduction limit
Immediate Expensing for Certain Industrial Structures: Applies to facilities used in manufacturing, refining, agriculture and related industries.
No Changes to Carried Interest Rules
Strengthened Opportunity Zones: Renewed with revised incentives to promote targeted investment, including in rural areas. NAR polling found that 80% of voters support such tax incentives to drive economic development in underserved communities.
Podcast Spotlight: ‘The Advocacy Scoop’ Breaks It Down
McGahn and NAR Vice President of Advocacy Communications Patrick Newton break down key wins in the latest episode of The Advocacy Scoop podcast (https://www.nar.realtor/advocacy/advocacy-scoop-podcast/the-senate-takes-on-the-tax-bill) released on Friday and discuss how the latest version took shape as it went through the “Byrd Bath” process in the Senate.
They also discuss a newly included provision establishing “baby bonds”—a one-time $1,000 government investment for each child born after the bill’s enactment.
When maximized, these bonds could provide significant funds toward a first home once the child reaches adulthood.
“This has been a long-time dream of NAR,” Newton says in the episode.
NAR Polling Helped Seal the Deal for Real Estate
In the final weeks of negotiations, original polling commissioned by NAR played a critical role in building support and momentum for real estate provisions in the bill.
The national survey, conducted in May, found overwhelming public backing for the real estate provisions in the legislation. Among the findings:
92% support tax-free savings accounts for first-time home buyers
91% support preserving tax incentives like the mortgage interest deduction
86% support maintaining lower-income tax rates for individuals and married couples
83% support the 20% deduction for independent contractors and small businesses
61% support increasing SALT deduction limits or removing limits altogether
Notably, 86% of voters supported the bill’s lower individual tax rates—one of NAR’s core advocacy priorities.
“We commissioned this poll just before our legislative meetings in May. Thousands of our members were able to take these numbers straight to lawmakers on the Hill, and they were very grateful for our work,” McGahn says. “It provided the research and data they needed to ensure homeownership was front and center in this bill. We also shared the findings widely through a public affairs campaign in Washington, making sure policymakers were operating with the best information possible. Our members, working together, packed a powerful message.”
About the author: Patrick Newton is the Vice President, Advocacy Communications and Outreach at the National Association of Realtors.
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