What the One Big Beautiful Bill Means for Farmland Investors

On July 4, 2025, the One Big Beautiful Bill Act (H.R.1) became law—a landmark legislative package that also touched multiple aspects of U.S. agriculture. With broad provisions around depreciation, conservation funding, farm safety nets, and estate taxes, the bill is poised to influence the farmland investing landscape through 2031.

While not every provision in the bill directly benefits FarmTogether’s strategy, several create a more favorable backdrop for farmland investing—particularly in terms of tax efficiency, income stability, and long-term land stewardship. 

Bonus Depreciation and Tax Clarity Support Investor Outcomes

One of the most investor-aligned provisions in the bill is the reinstatement of 100% bonus depreciation, along with the permanent extension of the 20% deduction for qualified business income under Section 199A. These tax code changes enhance the after-tax efficiency of farmland investments held through pass-through entities and can make capital improvements more attractive from a returns perspective.

Though individual tax outcomes depend on structure and investor status, this clarity allows for more confident underwriting and structuring of income-generating farmland strategies.

Extended Safety Nets Add Income Stability for Operators

Farmland returns are often tied to the financial health of the farmers who operate the land. The bill extends two cornerstone federal programs—Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)—through 2031, while increasing reference prices by 11% to 21% and expanding acreage eligibility.

While government programs won’t eliminate agricultural risk, they do offer a backstop that can reduce the impact of commodity price swings or market disruptions. For investors with exposure to lease income or revenue-sharing, this added layer of stability may support:

• Smoother year-over-year cash flows from tenants
• Reduced downside volatility in low-yield years
• Greater confidence in long-term income projections

Conservation Funding Supports Long-Term Land Health

The bill also boosts funding for USDA programs that support conservation and specialty crop production—two areas increasingly central to long-horizon farmland strategies. Specifically, it allocates:

• Continued funding for EQIP (Environmental Quality Incentives Program) and CSP (Conservation Stewardship Program), two major conservation cost-share programs
• $175 million for specialty crop research to support productivity and resilience
• Resources for agricultural trade promotion, helping U.S. growers access global markets

For farms producing almonds, citrus, grapes, or undergoing regenerative improvements, these programs support productivity, ecological health, and export market access—all contributing to long-term investment durability.

Estate Tax Relief: A Neutral Shift for Buyers

The bill increases the federal estate tax exemption to $15 million per individual ($30 million per couple), indexed to inflation. While this change may reduce the number of urgency-driven farmland sales—potentially limiting discounted acquisition opportunities—it could also lead to more orderly, transparent land transitions over time.

For FarmTogether, which underwrites properties for the long term, the resulting increase in high-quality supply may still be beneficial—even if it doesn’t drive prices downward.

New Capital Gains Rules Incentivize Long-Term Stewardship

Another provision allows sellers to defer capital gains taxes if land is sold to a buyer who commits to farming the property for 10 years. This rule primarily benefits farmer-to-farmer transactions and is unlikely to apply to FarmTogether acquisitions. While it may indirectly support conservation goals, its impact on investment opportunities is limited.

A Nuanced but Net-Positive Policy Backdrop

Not every provision of the One Big Beautiful Bill benefits farmland investors equally. However, the legislation introduces meaningful clarity around tax treatment, operator income stability, and sustainability—all of which support the investment case for U.S. farmland.

At FarmTogether, we proactively monitor regulatory shifts like H.R.1 to ensure our structures, underwriting, and investor education reflect current conditions. Whether through direct offerings, 1031 exchange strategies, or diversified vehicles like the Sustainable Farmland Fund, our focus remains on helping investors access high-quality farmland opportunities with transparency and discipline.