As the 1,000-plus pages of President Trump’s tax reform measure, “One Big Beautiful Bill” Act, endures markups and makes its way through the Senate, the nation awaits the final version of the bill and its impact on their household finances.
The House of Representatives narrowly passed the Act by a vote of 215-214, legislation with key aspects that will strengthen housing affordability, investment, and generational wealth among other factors. However, if passed, the bill would also push more Americans off Medicaid and food assistance, and add is estimated to add trillions of dollars to the national debt over the next decade.
House Ways and Means Chairman Rep. Jason Smith noted: “This bill represents an historic opportunity to deliver economic freedom for working families, farmers, and small businesses. The House has acted. Now the Senate must do its part and send this bill to President Trump’s desk.”
“Broadly speaking, this is not intended to be a housing bill,” Andy Winkler, Director of the Bipartisan Policy Center’s Housing and Infrastructure Projects told CNN. “But there are several provisions that, if they do get enacted, could affect housing supply, preservation and affordability.”
Enhancements to the Low-Income Housing Tax Credit (LIHTC)
Part of the nation’s affordability issues are driven by a lack of housing inventory, which has driven up housing costs. Zillow estimates that the U.S. housing supply was 4.5 million homes in 2022.
President Trump’s The One Big Beautiful Bill Act includes changes to the Low-Income Housing Tax Credit (LIHTC), impacting both the 9% and 4% LIHTCs. It also addresses tax-exempt entities, including private foundations and universities, and makes changes to employee compensation limits for tax-exempt organizations. For 9% LIHTC, the bill restores the 9% LIHTC to its 2021 level for the years 2026-2029 and increases the allocation by 12.5%. The bill also lowers the bond-financing threshold for projects financed by bonds issued after 2025, but before 2030 to 25%, according to a report from CliftonLarsonAllen.
Estate Tax and Gift Exemptions
One Big Beautiful Bill will make permanent the doubled estate and gift tax exemption, currently at $13.99 million per person, in 2025, and increase it to $15 million. This calculation was indexed for inflation, beginning in 2026. The estate and gift tax exemption provision would provide certainty for estates and families, ensuring that they can pass down assets to future generations without the threat of a fluctuating exemption amount. One Big Beautiful Bill also includes other tax provisions, such as permanent extensions of business tax benefits and increased standard deductions for individuals.
Jim Tobin, President and CEO of the National Association of Home Builders (NAHB), told CNN that the LIHTC and SALT deduction expansions, along with increased tax benefits for small businesses, would be beneficial to homebuilders.
“We believe the bill will provide certainty in taxation for most individuals that are needed to usher in continued economic growth at a time when the housing industry desperately needs it,” Tobin said.
Tax-Advantaged Child Investment Accounts
President Trump’s 2017 tax cuts temporarily boosted the maximum child tax credit to $2,000 from $1,000, a move set to expire after 2025 without action from Congress. The One Big Beautiful Bill Act would make the $2,000 credit permanent and raise the cap to $2,500 from 2025 through 2028. After 2028, the credit’s highest value would revert to $2,000, and be indexed for inflation. The child tax credit supports U.S. families, and could help with housing affordability.
“Provisions supporting homeownership, including those related to mortgage interest and capital gains exclusions, help provide certainty for buyers, sellers and lenders alike—strengthening the entire housing ecosystem,” noted American Land Title Association (ALTA) CEO Diane Tomb. “We urge the Senate to build on this momentum and protect the real estate and housing incentives that help Americans build wealth, promote generational stability and drive our economy forward.”
Boosting the Nation’s Opportunity Zones
The One Big Beautiful Bill Act proposes a renewed Qualified Opportunity Zone (QOZ) program starting January 1, 2027, and running through December 31, 2033. An Opportunity Zone is a designation and investment program created by the Tax Cuts and Jobs Act of 2017, allowing for certain investments in lower income areas to have tax advantages. Their purpose is to spur economic growth and job creation in low-income communities, while providing tax benefits to investors.
One Big Beautiful Bill Act includes modified eligibility requirements, focusing on rural areas and narrowing the definition of low-income communities by narrowing the threshold for census tract eligibility. Tax incentives, such as deferred capital gains taxation, will be available for investments made in QOZs during this period. A portion of new QOZ designations, at least 33% (or all eligible rural areas if less than 33%), must be in entirely rural communities.
ATTOM reports that there are 3,558 opportunity zones around the U.S. with sufficient data were analyzed (meaning they had at least five home sales in the first quarter of 2025), and found that median single-family home and condominium prices increased from Q4 of 2024 to Q1 of 2025 in 48% of Opportunity Zones nationwide.
Mortgage Rates Could Rise
While housing provisions are a small part of the overall bill, an analysis by the Congressional Budget Office (CBO) found that it would add an estimated $2.4 trillion in debt over the next decade. When the government has a lot of debt, it needs to borrow money to keep paying the bills by selling Treasury bonds. If investors believe the government is more leveraged, they will demand higher interest rates to compensate for the risks of their investment.
These higher interest rates can come in the form of an increase to the 30-year fixed-rate mortgage (FRM) which Freddie Mac currently reports the 30-year FRM at 6.84% as of June 12, 2025, down slightly from last week when it averaged 6.85%. A year ago, at this time, the 30-year FRM averaged 6.95%.
As Winkler told CNN, “We care quite a lot about higher interest rates in the housing world. It means people buying fewer homes and people being able to build fewer homes.”
Click here for more on President Trump’s “One Big Beautiful Bill” Act.
