The sweeping reform contains several provisions that directly benefit homeowners, real estate investors, and developers—especially here in Greater Portland. Here’s what matters most:
Expanded SALT Deduction
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The State and Local Tax (SALT) deduction cap has soared from $10,000 to $40,000 for households earning up to $500,000, with gradual indexing through 2033.
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Maine homeowners paying high property or income taxes now have a larger federal shield—an immediate financial boost.
Mortgage Interest & Insurance Deductions
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The mortgage interest deduction remains permanently in place for loans up to $750,000 of acquisition debt Inman.
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New legislation also reinstates the mortgage insurance deduction, offering roughly a $2,364 average annual savings Investopedia.
Section 1031 Like‑Kind Exchanges
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The bill preserves full deferral under Section 1031, allowing property investors to defer capital gains by rolling proceeds into like-kind real estate.
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This is crucial for investors looking to upgrade or reposition investment properties without incurring immediate tax liability.
100% Bonus Depreciation & Section 179 Expensing
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100% bonus depreciation was reinstated permanently for qualified property placed in service after January 19, 2025—allowing immediate write-offs on improvements, HVAC systems, appliances, and more
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Plus, the Section 179 expensing limit has increased to $2.5 million (phasing out at $4 million), a boon for small developers and rehabbers.
QBI Deduction Boost for Pass‑Through Businesses
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The Qualified Business Income (QBI) deduction for real estate LLCs increases from 20% to 23%, permanently, benefiting over 90% of REALTORS® and small-scale rental operators.
Extended Opportunity Zones & Rural Incentives
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The Opportunity Zone program is now permanent, with an added rural incentive: a 30% basis step-up after 5 years for rural OZ investments.
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Urban zones are refreshed on a 10-year cycle, enhancing targeted redevelopment and your investment potential.
Bigger Estate & Gift Tax Exemption
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The estate tax exemption rises to $15 million per individual, indexed for inflation, which eases wealth transfer of real estate and allows heirs to avoid capital gains on inherited properties.
What This Means for You in Greater Portland
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Homeowners — Plan for tax season by itemizing deductions like mortgage interest and SALT; with the raised cap, you may get larger refunds or smaller bills.
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Renovators & DIY Investors — Take advantage of 100% bonus depreciation to accelerate write-offs and improve project cash flow.
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Property Investors — Use 1031 exchanges to optimize portfolio growth and OZ investments to tap federal incentives—especially in rural Maine.
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Business Owners & LLCs — Benefit from the QBI increase if your real estate operates through a pass-through entity.
Final Takeaway
The 2025 Federal Tax Bill offers front-loaded tax savings, enhanced deductions, and fortified deferral tools—creating an environment that’s favorable for both homeowners and real estate investors. Now’s the time to revisit your portfolio strategies, coordinate with your CPA, and explore potential opportunities from home renovations to portfolio transitions.
