Trump's One Big Beautiful Bill Offers Relief for Homeowners

The One Big Beautiful Bill Act (OBBBA) includes measures to help American homeowners, including raising the limit for state and local tax (SALT) deductions to $40,000 for five years and permanently extending the home mortgage interest deduction. These provisions will lower the federal tax burden for homeowners in high-tax states and add predictability for those deciding whether to buy a home.

The One Big Beautiful Bill Act (OBBBA), recently signed into law by President Donald Trump, includes several provisions aimed at providing relief to American homeowners. Among these measures, the act raises the limit for state and local tax (SALT) deductions to $40,000 for five years and permanently extends the home mortgage interest deduction. These changes are expected to significantly lower the federal tax burden for homeowners in high-tax states and add predictability for those considering homeownership.

Raising the SALT Deduction Limit

One of the most notable provisions in the OBBBA is the increase in the SALT deduction limit. The previous cap of $10,000, set by the Tax Cuts and Jobs Act of 2017, has been raised to $40,000 for the next five years. This change is particularly beneficial for homeowners in high-tax states such as New York, New Jersey, and California. Jenna Stauffer, a broker and global real estate advisor at Sotheby’s International Realty, explained that this provision "gives homeowners more breathing room" by lowering their overall federal tax burden and putting more money back in their pockets [1].

Permanent Extension of Home Mortgage Interest Deduction

The OBBBA also includes a permanent extension of the home mortgage interest deduction, keeping it at a maximum of $750,000 worth of mortgage acquisition debt. This measure is considered a "big deal" by Stauffer, as it provides a core incentive for homeownership and adds predictability for those deciding whether to buy a home [1].

Potential Economic Impact

The changes in the OBBBA could have a significant impact on the housing market. By lowering the federal tax burden on homeowners, these provisions could make homeownership more affordable and encourage more people to buy homes. This, in turn, could help stimulate economic growth and address the current housing shortages.

However, the long-term effects of these changes remain to be seen. The SALT deduction limit will revert to $10,000 in 2030 unless it is made permanent, which could create uncertainty for homeowners in the future.

References

[1] https://www.foxbusiness.com/real-estate/american-homeowners-families-get-relief-one-big-beautiful-bill
[2] https://www.yahoo.com/lifestyle/articles/exclusive-marjorie-taylor-greene-shares-204519032.html