The real estate investing world received a special gift on July 4, 2025 wrapped in red white and blue. Congress restored 100% bonus depreciation with the One Big Beautiful Bill (OBBB). This is a game changer for seasoned investors. This may be the most tax-friendly environment in your life for those who are considering making their first investment.
It does more than just reduce your tax bill. This reshapes long-term wealth strategies for NNN (triple-net) lease investors who depend on predictable tax benefits and steady cash flow to maximize returns. This development, combined with the preserved 1031 exchange rules and newly enhanced deductions for business, is what many call the biggest tax victory in recent history for real estate investors.
Let’s break down what it means to you, why it is important for NNN leases buyers, and how to strategically position yourself so that you can take advantage of this once-in-a generation opportunity.
What is Bonus Depreciation? Why does it matter?
Real estate investing has always relied on depreciation. Commercial properties are depreciated according to standard rules over 39 years. This means that you can recover a small portion of your investment every year via tax deductions. It’s an effective benefit, but it is slow to materialize.
Bonus depreciation speeds up this process. Investors can deduct a significant portion of the eligible property costs, or in this case 100%, in their first year. This means that investors will receive immediate tax relief and a reduced taxable income. They can also use the savings to make additional investments.
Many feared that the tax benefit had peaked when bonus depreciation gradually decreased after 2022. The OBBB, however, has permanently altered the landscape. Congress, by securing 100% bonus depreciation for investors to write off significant portions of property related improvements and components in the future without having to wait decades before realizing benefits.
Why NNN Lease Investors Benefit the Most
NNN leases are an investment segment that is unique in the world of commercial real estate. Investors can expect a steady, long-term cash flow from these properties. They are often leased out to national tenants with good credit, such as retail chains, pharmacies or convenience stores. Tenants take care of property expenses such as taxes, insurance and maintenance. This allows investors to enjoy passive income, without the hassles associated with traditional rental properties.
NNN investment is even more attractive with the restoration of the 100% bonus depreciation. Here’s why:
- Initial Write-offs of Significant Amounts: Investors who purchase properties that have significant improvements and/or building components may be able to deduct a large portion of the cost basis immediately.
- Enhanced Cash-on-Cash Returns: By reducing the taxable income during the first year of rental income, investors can keep more of their rental income and improve real returns.
- Attractive for High-Income Individuals: For those who want to protect themselves from higher tax brackets by reducing their exposure, bonus depreciation can be a powerful tool.
This is especially important for first-time NNN purchasers. You get a steady, hands-off stream of income, and you benefit from a tax incentive that dramatically increases the profitability of your investment.
A Perfect Match with 1031 Exchanges
The OBBB did not just restore bonus depreciation, it also preserved the much-loved 1031 exchange. These two provisions work together to create an incredible synergy in wealth creation.
You can defer capital gains tax by selling an investment property, and then rolling the proceeds into another property of similar kind with a 1031 exchange. You can defer taxes and also get a 100% bonus on depreciation by combining the two while also front-loading enormous depreciation benefits on your replacement property.
Imagine upgrading from a small retail property to a big-box NNN-leased store via a 1031 exchange. You can avoid capital gains taxes on the sale and write off a large portion of the value of your new property in the first year. It is very rare to find such a compounding of tax efficiency. This makes the current environment one of best in history for repositioning or scaling your real estate portfolio.
Retirement Planning and Generational Wealth
NNN properties can be a cornerstone of retirement and wealth strategies for many investors. Renting a property to a national tenant for 15-20 years can provide a stable and predictable income stream that can be used as an asset in retirement or as a legacy.
These investments offer an immediate tax shelter, thanks to the 100% bonus depreciation. These investments are particularly appealing to those who are approaching retirement and want to reduce their taxable income during the years of highest earnings while also securing a long-term, reliable passive income.
NNN investments are a powerful tool for families who plan to transfer wealth between generations. They can combine tax deferral (1031 Exchanges), tax acceleration strategies (bonus depreciation), as well as estate planning strategies. You can secure these benefits now and not only benefit from current returns, but also protect your heirs financial future.
Why 2025 is the Year to Act
This advantage of 100% depreciation will not disappear because it is permanent under OBBB. Act now while tax incentives and market conditions are aligned to maximize the opportunity.
Commercial real estate is experiencing a unique moment. Interest rates, tenants’ demand and the broader economic climate have all created challenges and opportunities. Investors with a longer-term perspective will find that 2025 is the best time to invest in assets. This is because of the combination of quality tenants, predictable leases and powerful tax instruments.
Our team is specialized in helping first-time NNN Lease buyers find the best property to meet their budget, income requirements, and investment goals. We do more than just find you a property. We guide you through every step of the process from due diligence, to tax strategies, to long-term planning.
Expert guidance to navigate Through the complexity
The real estate market and tax code can be complex, but the potential rewards are great. Each investor has a unique situation, so structuring the purchase to maximize benefits requires careful analysis.
Not all components of a property are eligible for bonus depreciation. To determine which parts of the building or improvements can be expedited, a cost segregation study may be needed. The 1031 exchange deadlines are also strict and unforgiving. If you miss a deadline, your deferral benefit could be completely eliminated.
Professional guidance is essential. Our team works with investors to optimize every detail. We act as your trusted adviser in transforming today’s tax environment into long-term wealth.
Final Thoughts
The return of 100% bonus depreciation to NNN leases is more than just a tax tweak. It is a historic shift that will open up extraordinary opportunities for NNN leasing investors. Combining the restored 1031 exchange with enhanced business deductions creates an environment that is designed to accelerate wealth creation like never before.
Now is the perfect time to take action, whether you are considering purchasing your first NNN, planning for retirement or preparing your family for a generational wealth transfer. You can build a lasting legacy with the help of expert advice and the right strategy.
Parr & Ibarra CPA Firm in Keller, Texas is committed to helping investors take advantage of this historic opportunity. Let us simplify the process and help you position your investments to maximize growth.
