Member FAQs, Government Changes for Appraisers
In this issue:
- Member FAQ: New resource to provide clarity surrounding recent Appraisal Institute news and operations
- Tax Reform Bill: How the “One Big Beautiful Bill Act” will affect appraisers
- Fee Reductions in Washington: WA Governor Vetos Appraiser Licensing Fee Reduction Bill
Insights
Tax Reform Bill Advances with Key Provisions Impacting Real Estate and Valuation
The U.S. House of Representatives recently passed the “One Big Beautiful Bill Act” (H.R. 1), a sweeping tax package that would make permanent many of the 2017 Tax Cuts and Jobs Act provisions while adding new measures of interest to the real estate and appraisal professions. As the bill moves to the Senate, real estate appraisers should take note of the following highlights:
- No Change to Carried Interest Treatment: The legislation preserves the current tax treatment of carried interest, often a factor in the valuation of general partnership interests and incentive-based equity structures in real estate development and investment.
- Enhanced Pass-Through Deduction (Section 199A): The deduction for qualifying income from pass-through entities—such as partnerships and LLCs—would increase from 20% to 23%. This includes REIT dividends and real estate operating income, which could impact net income available for distribution and therefore asset values. REITs would also benefit from greater flexibility in structuring taxable REIT subsidiaries.
- Extension of Opportunity Zones: Opportunity zone (OZ) tax incentives would be extended through 2033, with updated eligibility criteria and targeted benefits for rural areas. State governors would also have the ability to designate new OZs. Appraisers working in development-heavy markets should be prepared for continued demand in designated OZ areas.
- Restoration of 100% Bonus Depreciation: The bill reinstates full expensing for qualifying leasehold and nonresidential property improvements, encouraging immediate reinvestment in commercial properties—a potential valuation driver, particularly for stabilized assets undergoing repositioning.
- Expansion of the Low-Income Housing Tax Credit (LIHTC): Increased support for affordable housing projects may spur new construction and redevelopment activity, particularly in urban and underserved markets. Appraisers involved in these markets may see increased demand for valuation services tied to LIHTC transactions.
- Estate and Gift Tax Changes: The basic exclusion amount for estate, gift, and generation-skipping transfer taxes would increase to $15 million beginning in 2026, indexed for inflation. Appraisers conducting valuations for estate planning and wealth transfer purposes should monitor this change closely, as discussed on a recent Trending Topics webinar from the Appraisal Institute.
Next Steps
The Senate will take up the legislation after the Memorial Day recess, with changes expected before final passage. The real estate and appraisal communities will continue to monitor developments that may influence property investment, transaction volume, and valuation methods.
Your Benefits
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Trending Topics Thursdays:
Sign up for our next free webinar
Environmental Risk Updates for Appraisers
June 26 | 12:00 p.m. ET
Environmental and sustainability issues are playing a growing role in real estate valuation and risk analysis. This timely webinar will provide appraisers with essential updates on a range of emerging environmental risk topics, including:
- ESG (Environmental, Social, Governance) considerations for appraisers
- Resiliency and sustainability measures in real estate
- Evolving practices in Phase I and Phase II Environmental Site Assessments (ESAs)
- Integration of appraisal and environmental functions within financial institutions and advisory firms
Learn how these trends are shaping due diligence, valuation reporting, and client expectations. This session will help you navigate shifting standards and strengthen your risk awareness.
Panelists:
- Becci Curry, MAI, Head of Quality and Risk Management – Americas, CBRE
- Derek Ezovski, President, Outsourced Risk Management Solutions (ORMS)
Companion URAR Courses Covered by Appraisal Buzzcast
Appraisal Buzzcast featured Jared Preisler, SRA, the instructor for the premiere of two URAR companion courses offered by the Appraisal Institute earlier this month. From market analysis to the sales comparison approach, the Appraisal Buzzcast breaks down how appraisals are evolving and how you can prepare for success. Plus, hear all about the exciting post-event CE opportunities at Valuation Expo in partnership with the Appraisal Institute. Register here for the conference and companion courses!
Advocacy Updates
Washington Governor Vetos Appraiser Licensing Fee Reduction
On May 20, Washington Governor Bob Ferguson issued a line-item veto eliminating a provision in the state’s FY 2025–2027 budget that aimed to ease recent increases in appraiser licensing fees, which took effect in October 2024. The original legislation, SB 5167, included a $400,000 appropriation to the Department of Licensing, directing the agency to cap annual fees for new or renewed certified real estate appraiser licenses at no more than 33% above the rates in effect as of October 1, 2024.
In his veto message, Governor Ferguson explained that real estate appraisers, like other licensed professions regulated by the Department of Licensing, are expected to fully fund their regulatory programs through licensing fees. He stated that he vetoed the provision due to “the state’s significant fiscal challenges and funding cuts from the federal government.”
The provision had strong backing from the Appraisers’ Coalition of Washington (ACOW), which includes the Appraisal Institute. In an email to Washington appraisers, ACOW President Kathy Walsh expressed concern that “the full breadth of the circumstances surrounding our increase in license fees was not clear.” She added that the Coalition plans to communicate directly with the Governor to emphasize the seriousness of the issue and the potential long-term impact on the appraisal profession.
Minnesota Governor Signs Eminent Domain Reimbursement Increase
On May 23, Minnesota Governor Tim Walz signed into law a budget provision that raises the reimbursement limits for property owners who obtain their own appraisals in eminent domain cases. Previously, the maximum reimbursement was $1,500 for single- and two-family residential properties and $5,000 for all other property types. Under the new law, those limits increase to $3,000 and $10,000, respectively. The acquiring authority is required to reimburse the property owner within 30 days of receiving both the appraisal and the related documentation. The Appraisal Institute’s North Star Chapter played a key role in advocating for these changes.
Become an Appraisal Institute Key Contact
Do you know a member of Congress—maybe socially, through community events, or even from school? That connection could make a big difference. Join the Appraisal Institute’s Key Contact Program, a national network of appraisers who advocate for the profession by building on their relationships with lawmakers and advancing AI’s policy priorities.
Whether it’s a face-to-face in D.C., a local meeting, or simply showing a legislator what appraisers really do, your voice matters.
Help shape the future of your profession!
Real Estate Horizons
Stay updated and check out links to the latest major real estate industry stories!
More Opportunities to Learn
Search the latest educational offerings! Find National and Chapter-sponsored classroom, synchronous, and online opportunities.
Your Community
Member Milestones and Remembrances
We honor the memory of our recently departed members in this month’s In Memoriam. We also celebrate the achievements of those who have earned a designation this month—congratulations to our Newly Designated Members!
2025 Award Nominations
The Appraisal Institute would like to recognize some of the brightest, most committed, and deserving AI Professionals. If you believe you know an AI member who fits the criteria below for the J. Scott Robinson Lifetime Achievement Award, Outstanding Service Award, William S. Harps DEI Award, or the Women’s Initiative SPOTLIGHT Award, we welcome your nomination by the July 31 deadline.
Y.T. and Louise Lee Lum Award
The Appraisal Institute Education and Relief Foundation (AIERF) is seeking nominations from AI members for the Y.T. and Louise Lee Lum Award.
The Y.T. and Louise Lee Lum Award recognizes one or more worthy individuals who have made a distinguished contribution to the appraisal profession during the immediately preceding year. The Y.T. and Louise Lee Lum Award is open to both Appraisal Institute individuals as well as those that do not belong to the Appraisal Institute. The Y.T. and Louise Lee Lum Award is given in recognition of and great appreciation for the distinguished contribution to the furtherance of the high ideals of the profession of real estate appraising and practices, mindful of the fact that this contribution was possible only through the zeal, uprightness, sacrifice, devotion, acumen, and ability of the contributor.
Selection of the recipient is made by the Directors of the Appraisal Institute Education and Relief Foundation. Nominators should provide:
- Letter of recommendation focusing on distinguished contribution to the appraisal profession made during the immediately preceding year;
- Resume of the nominee or brief biography of the nominee
Please email these items to aierf@appraisalinstitute.org. For more information on AIERF and the awards, please visit the AIERF website.
Submissions for these Awards must be completed by July 31.
Until next week,
Team Appraisal Institute
