How the 2025 Tax Rules Are Shaping Real Estate Investment in Central Oregon

The 2025 tax reform bill (also called the “One Big Beautiful Bill Act”) is shaking things up for real estate investors nationwide—and here in Central Oregon, the changes could make a big difference in how you buy, sell, and hold property. Whether you’re looking at Bend multifamily housing, Redmond rentals, or even raw land near Sisters, it’s important to know how these rules affect your bottom line.

Let’s break it down.

1. Bonus Depreciation Is Back—And Permanent

In the past, bonus depreciation was phasing out. Now, it’s permanent at 100%.

What does this mean? You can immediately deduct the full cost of things like appliances, flooring, or roofs with a life of 20 years or less. For Central Oregon investors, this boosts cash flow and makes property improvements more tax-friendly.

2. More Room for Interest Deductions

The government changed the formula for how much mortgage or loan interest you can deduct. Instead of being based on EBIT (earnings before interest and taxes), it’s now based on EBITDA (earnings before interest, taxes, depreciation, and amortization).

Translation: More of your interest is deductible—great news if you’re financing rentals or development projects.

3. Opportunity Zones & Affordable Housing Expansion

If you’ve been watching Bend’s housing market, you know affordable housing is a huge issue. The 2025 tax reform made two big moves here:

• Opportunity Zones (OZs) are now permanent: Long-term investors can lock in serious capital gains savings.

• Expanded Low-Income Housing Tax Credits (LIHTC): Bigger incentives for building or investing in affordable housing.

For areas like Redmond and Prineville, this could mean new developments and more investor opportunities.

4. REITs Get More Flexibility

If you invest through REITs (Real Estate Investment Trusts), the ownership limit for taxable subsidiaries went from 20% to 25%. That gives REITs more flexibility to expand into different income streams—potentially boosting investor returns.

5. Energy-Efficient Tax Breaks Are Ending Soon

The Section 179D deduction (for upgrades like solar, HVAC, or insulation) will phase out after June 2026. If you’re planning to add energy-efficient improvements to your rentals or commercial property, the clock is ticking.

6. SALT Deduction Cap Raised

The State and Local Tax (SALT) deduction cap jumped from $10,000 to $40,000. This especially helps Oregon investors with higher property taxes, giving you more room to write off costs.

Why This Matters in Central Oregon

• Investors in Bend and Redmond can increase cash flow through bonus depreciation and interest deductibility.

• Developers may find new affordable housing projects more attractive with expanded tax credits.

• Landlords should consider energy upgrades now to take advantage of deductions before 2026.

• REIT investors gain new diversification options.

In short: The 2025 rules create both opportunity and urgency—especially if you’re looking at timing your next move.

The 2025 tax reform bill isn’t just noise from Washington—it’s real money in your pocket if you plan correctly. From Bend to Redmond to Sisters, investors who move strategically could see significant savings and stronger returns.

FAQs

Q: Do these changes affect small landlords, or just big developers?

A: Both. Even if you own one rental in Bend, bonus depreciation and interest deductions can save you money.

Q: Should I wait until 2026 to invest?

A: Not necessarily. Many of the biggest benefits (like bonus depreciation and interest deductibility) apply now. Waiting could mean missing out on energy-efficiency deductions.

Q: What’s the best strategy for Central Oregon investors?

A: That depends on your goals. If you’re building or buying rentals, act now to maximize deductions. If you’re interested in affordable housing, the expanded credits make that more attractive long-term.