How the New 2025 Tax Reform Impacts Homeowners, Investors, and Real Estate Agents

Significant changes are underway—and they bring promising opportunities to communities across Arkansas. On July 4, 2025, President Donald Trump signed into law the One Big Beautiful Bill Act, enacting the largest tax reform package in nearly a decade. While this reform affects Americans nationwide, its financial and economic implications hold special importance for Arkansas homeowners, real estate investors, and professionals.

At Garka Group, we’re here to unpack what these changes mean for you—and how to use them to your advantage.

For Homeowners in Arkansas: Tax Relief and Long-Term Savings

Mortgage Interest Deduction Now Permanent

Homeowners in Arkansas can continue to deduct interest paid on their mortgages—a significant financial benefit that now has no expiration. This supports affordability and home equity growth.

SALT Deduction Cap Quadrupled

Beginning in 2025, the cap on state and local tax (SALT) deductions will increase significantly for five years. This means Arkansas taxpayers can deduct a larger portion of their state and local property taxes on their federal returns, reducing overall tax bills.

Expanded Child Tax Credit

Families across Arkansas will benefit from the newly increased $2,200 child tax credit, now indexed to inflation. This added relief helps balance housing and family costs, especially for growing households.

For Arkansas Real Estate Investors: Greater Incentives, More Flexibility

1031 Like-Kind Exchanges Remain Untouched

One of the most powerful tools in real estate investing is safe. Investors can still defer capital gains taxes when exchanging like-kind properties—a strategy widely used to build wealth through real estate.

Business SALT Deductions and Immediate Expensing

Investors operating as LLCs or other entities will continue to benefit from business-related tax deductions, including immediate expensing of eligible assets. This supports continued investment in infrastructure, rentals, and development projects.

Strengthened Opportunity Zones

The bill renews incentives in Opportunity Zones, encouraging investment in underdeveloped and rural regions of Arkansas, creating jobs, improving infrastructure, and enhancing local communities.

For Arkansas Real Estate Professionals: Business-Boosting Tax Changes

Section 199A Business Deduction Permanently Extended

Self-employed real estate professionals and small brokerages across Arkansas can continue to deduct up to 20% of qualified business income, strengthening profit margins and reducing tax liabilities.

Permanent Lower Individual Tax Rates

The personal income tax reductions originally passed in 2017 are now here to stay, giving real estate agents more certainty in financial planning.

Bonus Depreciation Restored

Firms making investments in buildings, equipment, or technology can deduct more expenses upfront—encouraging continued growth and reinvestment in their services.

Family Wealth and Future Homebuyers in Arkansas

One of the bill’s forward-looking provisions is a $15 million estate and gift tax threshold, protecting assets passed on to children and grandchildren. For Arkansans passing on homes, farmland, or investment property, this change helps preserve generational wealth.

Also included is the new “baby bonds” program—a one-time $1,000 investment by the government for every child born after the law takes effect. These funds will grow over time and can later support homeownership or education, promoting financial independence for future generations.

FAQs: 2025 Tax Reform and the Arkansas Real Estate Landscape

Will I pay less in taxes as a homeowner in Arkansas? Yes. The permanent mortgage interest deduction and expanded SALT cap both help reduce your federal tax liability.

Is this a good time to start investing in Arkansas real estate? Absolutely. Continued protections for 1031 exchanges, business deductions, and investment incentives make Arkansas a strong market for long-term growth.

How do these changes benefit new families? The increased child tax credit and baby bonds initiative help offset costs for growing families and lay the foundation for future homeownership.

What about estate planning for Arkansas property owners? The $15 million exemption makes it easier to pass real estate to heirs without tax burdens—supporting long-term wealth transfer.

Do these changes help rural areas, too? Yes! Strengthened Opportunity Zones are specifically designed to attract development to underserved areas across Arkansas.

Are there benefits for real estate agents and small firms? Definitely. Agents can continue claiming business income deductions, enjoy permanent lower tax rates, and take advantage of restored bonus depreciation rules.

Garka Group’s Takeaway

The 2025 tax reform law brings more than policy changes—it brings new possibilities for Arkansans across the real estate landscape. Whether you're buying your first home, investing in your future, or helping clients achieve their dreams, these reforms offer powerful tools for growth, savings, and stability.

Contact Garka Group to learn how these tax changes could impact your next move—and how we can help you make the most of them.

Want to Know What the One Big Beautiful Bill Act Means for You?

To help you navigate this significant piece of legislation with confidence, we’ve created three targeted guides—each tailored to a specific role in the real estate market:

• OBBBA: What Homeowners Need to Know

• OBBBA: What Buyers Need to Know

• OBBBA: What Real Estate Investors Need to Know

Each guide offers a clear, actionable breakdown of how the One Big Beautiful Bill Act may affect your property decisions, financial outlook, and future opportunities.

Get the Guide

Because when you're equipped with the right insights, you're empowered to move forward with clarity and confidence.