On June 3, 2025, Ernst & Young’s Washington Council hosted a high-level webinar focused on the fast-approaching tax policy shifts expected to impact the real estate, hospitality, and construction industries. As the expiration date for several provisions of the 2017 Tax Cuts and Jobs Act (TCJA) nears, business leaders, investors, and advisors tuned in to better understand the future tax landscape and how to navigate it effectively.
The hour-long session featured policy experts and tax strategists who discussed the challenges and opportunities these changes present. With sweeping updates on regulatory guidance, strategic tax planning, and legislative forecasts, the event served as a timely wake-up call for stakeholders operating in sectors heavily influenced by tax policy.
Key Topics Covered During the Webinar
1. Expiration of the Tax Cuts and Jobs Act Provisions
The webinar opened with a deep dive into the sunsetting provisions of the TCJA, many of which are set to expire at the end of 2025 unless extended or revised by Congress. Of particular interest to the real estate community were the provisions impacting pass-through entities, bonus depreciation schedules, and limitations on interest deductibility.
The 20% qualified business income (QBI) deduction, which has benefited many real estate professionals structured as LLCs or partnerships, is scheduled to lapse. Without congressional action, this could lead to a significant increase in tax liability for these entities. The same applies to individual rate cuts and increased standard deductions that have indirectly supported the real estate market by improving household disposable income.
2. IRS and Treasury Guidance Update
The second segment of the webinar focused on recent guidance and interpretations from the IRS and U.S. Department of the Treasury. Officials highlighted increased enforcement around real estate professional status claims, passive activity loss limitations, and evolving rules on like-kind exchanges.
Attendees were also briefed on the expanded use of digital tools by the IRS to flag inconsistencies and improve audit efficiency, particularly in industries known for complex asset structures and flow-through taxation like real estate. Emphasis was placed on accurate record-keeping, especially for depreciation schedules and capital improvement tracking.
3. Strategies for Tax Planning and Risk Mitigation
The final portion of the event offered actionable strategies for tax planning. EY professionals encouraged businesses to undertake proactive evaluations of their current tax strategies and explore options that could provide flexibility ahead of potential law changes.
Recommendations included: restructuring business entities where necessary to adapt to a post-TCJA environment, accelerating certain capital expenditures to take full advantage of current depreciation rules, and conducting scenario modeling to estimate tax burdens under multiple legislative outcomes. The value of early engagement with tax advisors was strongly underscored, especially for firms involved in long-term real estate development projects or complex financing arrangements.
Broader Impacts on the Real Estate and Construction Sectors
The expiration of TCJA provisions and the changing regulatory landscape will reverberate across multiple dimensions of real estate operations. From commercial leasing to residential development, tax policies affect every stage—from land acquisition and financing to construction and eventual sale or lease.
In the hospitality sector, operators may face reduced after-tax cash flow due to the rollback of the QBI deduction and limitations on deducting interest expenses. For construction firms, changes in depreciation rules could disrupt current project planning, particularly for those relying on cost segregation studies to accelerate deductions.
These shifts come at a time when the real estate market is already responding to inflationary pressures, interest rate fluctuations, and shifting demographic demand. As such, tax policy becomes an even more critical variable in investment decision-making.
Practical Steps for Industry Professionals
EY’s panelists outlined several immediate steps for business leaders:
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Conduct a Tax Risk Assessment: Review how expiring provisions impact current and future operations.
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Engage with Policy Developments: Stay involved through trade associations and industry lobbying to advocate for favorable extensions.
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Enhance Reporting Infrastructure: Upgrade systems to meet increased compliance scrutiny and automate reporting wherever possible.
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Stress Test Financial Models: Evaluate deal viability under various tax scenarios to avoid future surprises.
Conclusion
As the 2025 sunset date for many TCJA provisions draws nearer, real estate professionals must prepare for a more complex and potentially less favorable tax environment. EY’s webinar served not only as an informative session but also as a strategic planning catalyst. Firms that act now to understand and adapt to these changes will be in a stronger position to thrive amid uncertainty.
