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Takeaways from the Big Beautfil Bill that impact Real Estate

By July 9, 2025November 3rd, 2025No Comments

 

CONTEMPORARY HOME 1000 px x 667 px

While it doesn’t include any new down payment grants or flashy first-time buyer programs, there is a big emphasis on tax savings and investment incentives for homeowners. 

KEY BENEFITS FOR BUYERS AND HOMEOWNERS:

1. Mortgage Insurance Is Now Tax-Deductible — Permanently
Borrowers using FHA, VA, USDA, or conventional loans with less than 20% down can now permanently deduct their mortgage insurance (PMI or MIP), subject to income limits.
➡ This means more long-term savings, making low-down-payment options more affordable.

2. Mortgage Interest Deduction Limit Locked In at $750K
The cap on how much mortgage interest borrowers can deduct is now permanently set at $750,000.
➡ In higher-priced markets, this gives clarity and helps clients plan more confidently when buying or refinancing.

3. SALT Deduction Increase (2025–2029)
State and local tax deduction limits will rise from $10K to $40K for many households.
➡ This especially helps buyers in high-tax states like California and New York, where homeownership just became more tax-friendly.

4. Expanded Affordable Housing Credits (LIHTC)
More funding is going toward building affordable rental housing.
➡ Over time, this can ease competition for entry-level homes and open more opportunities for first-time buyers.

BENEFITS FOR SELLERS AND INVESTORS:
1. 20% Tax Deduction for Rental Income Is Now Permanent
Real estate investors can keep deducting 20% of their rental income, improving cash flow and return on investment.
➡ This creates more stability for landlords and makes rental property ownership more attractive.

2. Interest Deductions for Investment Properties Stay Intact
Investors can still deduct the interest on loans tied to real estate.
➡ This is especially important with today’s higher interest rates and helps support investor demand.

3. 1031 Exchanges and Capital Gains Rollovers Remain Available
Rules allowing investors to defer taxes by reinvesting profits into new properties are unchanged.
➡ This encourages portfolio growth and helps sellers transition into new investment opportunities without tax penalties.

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Hi, I'm Darlene Harwick and I provide real estate service to buyers and sellers in the Palm Springs area.

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