Real Estate Realities Newsletter
April 2025
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The Current Administration’s Tax Policies And The
Impact On Rural Landowners

In late February 2025, the House passed their proposed budget, which included an extension to the 2017 Tax Cuts and Jobs Act (TCJA) and $4.5 trillion in expiring tax cuts. To pay for the cuts, which will decrease annual taxes for households making $360,000 or more, House Republicans announced plans to reduce federal spending and raise taxes on the average U.S. household by about $2,600 per year.

So how might this impact rural landowners? Buying land in rural areas has long offered the potential for significant tax savings through things like land development write-offs and passive income exemptions. And President Trump’s 2025 tax policy won’t necessarily eliminate these. But there are risks for rural landowners with an extended TCJA, and it’s important to know what those are as the bill proceeds to the Senate and, possibly, President Trump’s desk.

Understanding President Trump’s Tax Policies

At the heart of President Trump’s proposed tax policy is an extension of the TCJA’s tax cuts at a cost of $4.6 trillion over 10 years. The policy, published here, outlines several new tax breaks currently under consideration, as well as the possibly disappearing tax breaks that could be used to fund them.

Proposed changes include:

• Estate Tax and Inheritance Laws: Double the amount that families can gift to their heirs tax-free from $14 million to $28 million and permanently repeal the federal death tax.

• 1031 Exchanges and Capital Gains: Eliminate reduced capital gains tax rate on carried interest and preserve deferred gains from 1031 Like-Kind Exchanges.

• Tax Cuts and Reforms: Elimination of mortgage interest deduction, American Opportunity Credit, student loan interest deduction, Child and Dependent tax care credit, and other programs.

Other key provisions include eliminating income taxes on overtime pay and taxes, as well as eliminating income taxes on Social Security benefits, all of which could potentially help residents in rural communities.

How Rural Landowners Could Benefit

There are a few ways that rural landowners may benefit from the new budget plan.

Potential Tax Breaks for Farmers and Ranchers

Those who buy rural land for agricultural purposes will likely continue to reap the benefits of the IRS’s conservation-related tax break, which allows deductions of up to 25% of gross farm income for conservation expenses.

Business Deductions and Write-Offs

Commercial landowners in rural areas are entitled to steep deductions for qualified business expenses such as equipment, utilities, insurance, repairs, and building maintenance.

Federal Land Sales

Savvy investors could find cheap rural land for sale via a proposed increase in private sales of federal property.

Potential Challenges and Drawbacks 

President Trump’s 2025 tax policy isn’t without its challenges for everyday Americans, and that includes those who are purchasing or currently residing on land in rural communities.

Rising Property Taxes and Local Impacts

Many of the bill’s cuts in federal spending come from programs like Medicaid and food stamps, which could have an out-sized impact on rural communities and landowners.

Changing Subsidies and Federal Support

President Trump’s tax policy includes $230 billion in cuts to the Agricultural Committee, the group responsible for U.S. farm subsidies. Agricultural landowners would likely see a decrease in federal support via reductions in government-backed loans, payments, and insurance, as well as reduced agricultural subsidies for risk mitigation, conservation practices, and disaster aid.

What’s Next for Rural Landowners?

If you’re thinking of buying rural land, or if you’re already a landowner in a rural community, you’ll need to consider both the current landscape of tax regulations and the potential future landscape. You could likely be facing more tax liability under an extension of the TCJA, as well as decreased buying power if you’re one of the majority of Americans making less than $360,000 per year.

Keep in mind that the current budget plan has passed the house, but still needs to pass the Senate in order to become law. There’s a chance that things will change, though it’s unlikely President Trump’s tax cuts will be left out of the final bill.

Looking ahead, you may want to consider investing some time and resources into estate planning and learning about potential rate changes in your tax bracket. You should also review possible deductions related to your land purchase or land use in order to identify additional deductions that may lower your tax liability in the years ahead.

Find Your Perfect Rural Property

Tax policy comes and goes. And if your dream is to own land in rural America, it’ll still be possible during the Trump administration.

We recommend rural landowners – both current and prospective – work with a tax attorney to determine their liability under the TCJA extension and how it impacts their monthly budget. You should also talk to a local land agent or broker to get ahead of any potential federal land sales in your desired area. In the meantime, start your search for rural land for sale by state and make an investment that could benefit your family for generations to come.

Courtesy LandHub.com