SALT Deduction Limit Raised: Major Boost for High-Tax States

Relief for Homeowners, President Trump’s “One Big Beautiful Bill” (OBBBA) is delivering real economic relief to American families, especially homeowners. One of the standout provisions is the dramatic increase in the SALT deduction limit. Previously capped at $10,000 under the 2017 Tax Cuts and Jobs Act, the limit has now been quadrupled to $40,000 for five years.

This is a game-changer for residents of high-tax states such as New York, California, and New Jersey. Real estate experts believe this move will significantly reduce the federal tax burden for middle- and upper-middle-class families.

“There’s more breathing room now,” said Jenna Stauffer, a broker with Sotheby’s International Realty. “It puts more money back into people’s pockets—or at least prevents the IRS from taking as much.”

Income-Based Phase-Down Protects Middle-Class Families

The raised deduction includes a phase-down for individuals with modified adjusted gross incomes above $500,000, ensuring that the wealthiest Americans don’t benefit disproportionately. This strategy protects middle-income earners, providing them with maximum tax savings while preserving fairness.

Unless Congress acts to extend the policy, the SALT deduction limit will revert to $10,000 in 2030. Still, the current five-year window offers meaningful relief to millions of households.

Mortgage Interest Deduction Permanently Extended

Another key victory for homeowners is the permanent extension of the mortgage interest deduction. The deduction applies to mortgages up to $750,000 in acquisition debt.

This provision adds long-term predictability for buyers and encourages homeownership in an uncertain market.

“It’s a big deal,” said Stauffer. “When people are deciding whether to buy a home, knowing this deduction is in place forever provides real clarity.”

Homeowners now have a clear tax advantage when choosing to invest in property, especially during periods of inflation and fluctuating interest rates.

Affordable Housing Gets a Boost with LIHTC Enhancement

The bill also addresses the nation’s affordable housing crisis through a permanent enhancement of the Low-Income Housing Tax Credit (LIHTC). The state allocation ceiling for these credits is being raised by 12%, incentivizing more development of lower-cost rental units.

It also lowers the bond-financing threshold, making it easier for builders to qualify and receive federal support. These changes are expected to stimulate housing supply and reduce pressure on housing prices.

“This could help solve the affordability problem,” Stauffer explained. “Developers finally have a reason to build entry-level and affordable units.”

Introducing ‘Trump Accounts’ for America’s Children

One of the more innovative provisions in the OBBBA is the creation of “Trump Accounts”—tax-deferred savings accounts designed for American children.

These accounts work similarly to IRAs and can receive contributions from parents, family members, and even employers. The idea is to help children begin saving from birth, with funds available when they turn 18.

A pilot program will seed each account with a $1,000 government contribution for babies born between 2025 and 2028. The funds can be invested in approved assets, creating an early path toward financial security.

Helping the Next Generation Save for Homeownership

The Trump Account concept could help solve one of the most persistent financial challenges: saving for a down payment. According to a Bankrate survey, 81% of Americans said that saving enough for a down payment or closing costs is a significant obstacle to buying a home.

“This is a smart move,” Stauffer said. “If that money is invested wisely, it could grow into exactly what’s needed for a down payment.”

These accounts could also be used for education, housing, or other qualified investments, empowering young Americans before they even reach adulthood.

Economic Impact: More Cash in Pockets, More Families in Homes

With higher SALT deductions, permanent mortgage interest savings, and incentives for affordable housing, the One Big Beautiful Bill marks a seismic shift in tax and housing policy. It’s designed to give hardworking families real relief—not just in their bank accounts but in their ability to build long-term wealth through homeownership.

Millions of Americans now stand to benefit directly from the changes, especially those living in expensive states where taxes and housing costs have driven families out in recent years.

Trump’s Signature Reform Delivers on the American Dream

President Trump’s bold move to enact the OBBBA is a testament to his administration’s commitment to putting American families first. The legislation targets real pain points—like unaffordable housing and complex tax rules—and transforms them into solutions.

The bill offers the tools, incentives, and stability families need to thrive. Whether you’re a first-time homebuyer, a parent planning your child’s future, or a taxpayer living in a high-cost state, the OBBBA offers something for you.

Conclusion: A Beautiful Deal for the American People

From coast to coast, the effects of the One Big Beautiful Bill are being felt. Homeowners are seeing tax savings. Families are planning for the future. And developers are once again building affordable homes.

This isn’t just legislation. It’s a movement—one that reshapes the American economic landscape and opens doors for the next generation.

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