New Trump Tax Bill Brings Relief for California Homeowners
Higher SALT Deduction Could Mean Big Savings
The recently signed “One Big Beautiful Bill” introduces several homeowner-friendly provisions, most notably raising the SALT (State and Local Tax) deduction cap—an impactful change for high-tax states like California.
Why SALT Matters
SALT includes state and local income, property, and sales taxes—though taxpayers can only deduct either income or sales tax, not both.
A Higher SALT Cap—A Bigger Break for Homeowners
As of tax year 2025, the SALT deduction cap increases from $10,000 to $40,000 per household, extending through 2029. The cap begins to phase out for incomes above $500,000.
This change is especially beneficial in high-tax regions. A Californian earning $330,000 could save nearly $5,000 in federal taxes under the new limit.
Who Benefits Most
- Homeowners in high-tax states (CA, NY, NJ, etc.)
- High earners making $200,000–$500,000+ annually
- Taxpayers who previously didn’t itemize may now surpass the standard deduction threshold
Mortgage Deduction: What’s Not Changing
The mortgage interest deduction remains capped at $750,000 for joint filers ($375,000 for single filers). A prior provision to revert to a $1 million cap after 2025 has been shelved under the new law—the $750,000 limit stands permanently.
Additional Perks & Enhancements
- Standard deduction modestly increased and made permanent
- Higher child tax credit, deductions for tips and overtime, estate tax adjustments, and homecar loan interest write-off
- Several green energy tax incentives are being phased out or capped early
Impact on California Homeowners
For Californians paying high property or income taxes, the new SALT cap may significantly improve tax efficiency:
- Encourages itemizing deductions
- Reduces net ownership costs
- Supports homeownership in expensive markets
Bottom Line & Next Steps
If you own property in California—or are considering buying—this bill may provide meaningful tax relief. It's wise to:
1. Reassess your tax strategy for 2025–2029
2. Consider itemizing if you’re near the standard deduction threshold
3. Track mortgage interest, property tax, income tax, medical expenses, and charitable contributions
*Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult with a CPA or qualified tax professional to confirm how any legislation may affect your individual situation.*
Additional Reads
“Trump’s ‘Big Beautiful’ bill locks in key tax breaks for homeowners” — CNBC
American homeowners and families get relief with the 'one, big beautiful bill' - Fox Business