On July 4th, a new tax law was signed into effect—bringing renewed clarity and expanded benefits to real estate investors across the country. For RV and mobile home park owners and operators, this legislation isn’t just a refresh of prior rules—it represents a powerful opportunity to improve cash flow, enhance first-year returns, and better structure long-term investment strategies.
Below, we break down how this new tax legislation can impact and benefit park investors like you.
Key Tax Provisions that Stay the Same
Several real estate-friendly provisions introduced in the 2017 Tax Cuts and Jobs Act remain intact:
- 1031 Tax-Deferred Exchanges: Continue to defer capital gains taxes by reinvesting in like-kind property.
- Carried Interest: Maintains its current treatment.
- 20% Qualified Business Income (QBI) Deduction: Self-employed investors and small businesses can still deduct up to 20% of their business income from their taxable income.
Additionally, corporate and personal income tax brackets remain unchanged—though indexed for inflation.
7 Positive Updates for Park Investors in the New Law
1. Increased SALT Deduction
Beginning in 2025, the State and Local Tax (SALT) deduction increases from $10,000 to $40,000, phasing out at incomes above $500,000. This expanded deduction is a welcomed offset to local tax burdens—particularly for park owners in high-tax states—and is set to remain through 2030.
2. Higher Gift and Estate Tax Exclusion
Legacy planning just became more efficient. The estate tax exclusion increases to $15 million for individuals and $30 million for married couples, allowing owners to pass parks to heirs more tax-efficiently.
3. Greater Deductibility of Interest Expenses
Under prior law, interest expense was limited to 30% of adjusted taxable income (ATI), which included depreciation. The new rule excludes depreciation, amortization, and depletion from the ATI calculation—letting park owners deduct more of their financing costs.
4. Expanded Low-Income Housing Tax Credits
While not every park qualifies, those developing or converting into affordable housing models may benefit from expanded tax credits. Starting in 2026, the 9% credit rises to 12%, and 4% deals face less stringent financing thresholds—encouraging more affordable housing investment under Section 42.
5. Opportunity Zones Renewed & Refined
Opportunity Zones (OZs) are now permanent, with rolling five-year deferral periods and a 10% step-up in basis after five years. Even more compelling is the creation of Qualified Rural Opportunity Funds offering a 30% step-up. While new eligibility rules and census tract redraws take effect in 2027, savvy park investors should begin positioning now.
6. 100% Bonus Depreciation Is Back—Permanently
Originally set to phase down to 40% in 2025, bonus depreciation is now fully restored to 100% for qualified property placed in service after January 19, 2025. This is a game-changer for mobile home and RV park investors.
Through cost segregation studies, investors can break down their property into components (e.g., appliances, HVAC, interior partitions) that qualify for immediate deduction. This significantly enhances first-year returns, which is especially valuable in today’s higher interest rate environment.
7. Section 179 Deduction Cap Raised
The Section 179 expensing limit increases to $2.5 million, allowing businesses to deduct the full cost of qualifying personal property, equipment, and even software in the first year. For value-add park operators making infrastructure upgrades, this opens the door to stronger early returns.
What This Means for RV & Mobile Home Park Owners
The new tax law reduces uncertainty and gives park owners the ability to make more confident long-term decisions. Whether you’re considering a refinance, a sale, a capital improvement project, or an acquisition, these tax updates offer meaningful financial leverage.
By restoring and expanding deductions—especially depreciation—investors now have better tools to combat rising financing costs and defend profitability. With clarity restored around major tax provisions, the playing field is more predictable, allowing for smarter forecasting and value planning.
Let’s Talk Strategy
At North Star Brokerage & Advisory, we help RV and mobile home park owners navigate tax-efficient strategies, maximize their property value, and plan for long-term growth.
If you’re ready to discuss how these changes could impact your park—or want help planning your next move—reach out today.
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