President Trump recently signed H.R. 1—nicknamed the Big Beautiful Bill—into law. This sweeping legislation introduces several changes that could impact homeowners, prospective buyers, and real estate investors. Here's a breakdown of key provisions and what they may mean for you:
1. Mortgage Insurance Premium Deduction Made Permanent
If you currently own a home and fall within certain income limits, you can now permanently deduct your mortgage insurance premiums from your federal taxes. However, this benefit phases out for single filers earning more than $175,000 and joint filers with income above $250,000.
2. Mortgage Interest Deduction Capped
H.R. 1 permanently caps the mortgage interest deduction at $750,000. This change could affect high-end buyers and those refinancing large loans.
3. State and Local Tax (SALT) Deduction Increased Temporarily
From 2025 through 2029, the SALT deduction cap will be raised to $40,000 per household. A gradual phase-down will begin for incomes exceeding $500,000. For many, especially in high-tax states, this could make homeownership more financially appealing.
4. Investment Property Incentives
Real estate investors who qualify for the 20% Qualified Business Income (QBI) deduction can now count on this benefit being permanent. This is a significant win for those who operate rental or investment property businesses.
5. No New Federal Assistance for First-Time Buyers
The legislation does not introduce new federal programs for down payment or homebuyer assistance. If you're in the market for a home and need help with upfront costs, be sure to explore options through state housing finance agencies, local grants, or employer-assisted housing programs.
As always, it's a good idea to consult with a financial advisor or tax professional to understand how these changes may apply to your specific situation.
