Maximizing Tax Benefits Through Multifamily Real Estate Investment

Real estate investment tax benefits are among the most powerful tools available to accredited investors looking to build wealth while reducing taxable income. At Streamline Capital Group, we help investors along Utah’s Wasatch Front unlock the full potential of these advantages through strategic multifamily investments.

Let’s break down the most valuable real estate tax benefits for investors—and how you can use them to generate steady income and significant savings.

Why Real Estate Is Still a Top Tax Shelter in 2025

Despite shifts in the economy and tax code, real estate remains one of the few asset classes that offers income and generous tax treatment. According to a recent article from Business Insider, high-net-worth investors are increasingly turning to cost segregation and depreciation to reduce their tax burden, sometimes saving hundreds of thousands per year.

And with the IRS still allowing 1031 exchanges and mortgage interest deductions, multifamily real estate provides an unmatched blend of tax efficiency and long-term growth.

Top Real Estate Investment Tax Benefits You Should Know

1. Accelerated Depreciation Through Cost Segregation

Cost segregation allows investors to accelerate depreciation deductions by reclassifying certain property components into shorter depreciation schedules. This strategy can lead to substantial tax savings. For instance, one commercial real estate investor saved $1.8 million in taxes by investing $10,000 in a cost segregation study. Typically, 20% to 40% of a commercial building's cost can be reclassified for quicker depreciation, resulting in federal tax savings ranging from $50,000 to over $150,000 per $1 million of building cost.

2. 1031 Exchange: Deferring Capital Gains Taxes

A 1031 Exchange allows you to defer capital gains taxes on the sale of an investment property by reinvesting the proceeds into a like-kind property. This strategy enables you to defer taxes indefinitely, allowing your investment to grow without the immediate tax burden.

3. Long-Term Capital Gains Tax Rate

In 2024, the U.S. government reduced the long-term capital gains (LTCG) tax rate on real estate from 20% to 12.5%, eliminating the indexation benefit. This change can result in substantial tax savings for most taxpayers, as the nominal real estate returns are generally in the region of 12-16% per annum, much higher than inflation.

4. Depreciation Deductions

Depreciation allows you to deduct the cost of the property over its useful life, reducing your taxable income. This non-cash deduction can significantly lower your tax liability, especially in the early years of property ownership.

5. Interest and Property Tax Deductions

Mortgage interest and property taxes are deductible expenses that can further reduce your taxable income. These deductions are particularly beneficial for investors with significant financing on their properties.

Real Estate Tax Benefits for Investors in 2025: What's New?

In 2025, the IRS will maintain many of the investor-friendly provisions introduced in recent years. Key takeaways from recent updates:

• The bonus depreciation phaseout has begun but remains powerful (60% in 2025).

• Long-term capital gains tax remains favorable (generally 0%, 15%, or 20% based on income level).

• Estate tax thresholds remain high, making real estate an attractive legacy asset.

Real estate continues to offer some of the most powerful legal ways to reduce federal taxes.

How Streamline Capital Group Helps You Maximize Returns and Reduce Taxes

Our strategy is designed with tax efficiency in mind:

 ✅ Acquire value-add multifamily properties ✅ Apply cost segregation and maximize depreciation ✅ Refinance and return capital early ✅ Hold long-term for cash flow and appreciation

We focus on C+ to B- class multifamily assets in strong-growth areas like Salt Lake City, where demand and rents are rising. This structure not only creates double-digit returns but also allows our investors to unlock meaningful tax savings every year.

🔗 Ready to Take the Next Step?

Want to see how these tax benefits can work for your portfolio?  👉 Join our investor network today and explore pre-vetted multifamily deals with built-in tax advantages.