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ARTICLE · 07 JULY 2025

Tax Reform Update: Senate Bill Includes Key Win For Condominium Developers

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

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UPDATE: The One Big Beautiful Bill Act was signed into law on July 4, which included the change to the percentage of completion method described below.

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Jonathan H. Canter
Jonathan H. Canter
Pamela Capps
Pamela Capps
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Mariya Khvatskaya
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UPDATE: The One Big Beautiful Bill Act was signed into law on July 4, which included the change to the percentage of completion method described below. Note that the effective date for this change is for contracts entered into in taxable years beginning after the date of enactment (e.g., for calendar year taxpayers, beginning in 2026).

On July 1, the Senate's version of the "One Big Beautiful Bill" passed the Senate. Such bill included a new provision (not in the House bill) that would provide significant tax relief to condominium developers. The bill provides that condominium developers will be able to use the completed contract method for reporting income from sales of to-be-built condominiums rather than the percentage-of-completion method.

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