Trump’s OBBBA delivers significant tax benefits for American homeowners

The One Big Beautiful Bill Act (OBBBA), recently signed into law, contains some measures that will help American homeowners. 

The piece of legislation officially became law after President Donald Trump signed the package of tax cuts and spending policies on July 4.

President Donald Trump, joined by Republican lawmakers, signs the One, Big Beautiful Bill Act into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025 in Washington, D.C. (Samuel Corum/Getty Images / Getty Images)

One policy within the nearly 900-page bill that homeowners could find helpful is how it addresses the cap on state and local tax (SALT) deductions.

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In the OBBBA, the limit for SALT deductions was raised to $40,000 for five years, much higher than the $10,000 previously allowed under the Tax Cuts and Jobs Act that Trump signed in 2017.

That provision includes a “phase down based on modified adjusted gross income” above $500,000, according to the legislation.

“The higher limit on SALT gives homeowners in high-tax states like New York, New Jersey and California more breathing room,” Jenna Stauffer, a broker and global real estate advisor at Sotheby’s International Realty, told FOX Business. “By raising the cap on how much they can deduct for state and local taxes, it lowers their overall federal tax burden. It puts more money back in people’s pockets or, at the very least, it doesn’t take out as much.”  

Come 2030, however, the SALT deduction limit will go back to $10,000 unless it is made permanent.

Elsewhere in the OBBBA, lawmakers granted a permanent extension of the home mortgage interest deduction, keeping it at a max of $750,000 worth of mortgage acquisition debt.  

Stauffer described this measure as a “big deal.” 

“It’s a core incentive for homeownership, and it adds predictability, which is really important when people are deciding whether to buy and how much they can afford,” she explained.

The One Big Beautiful Bill Act sets the limit for SALT deductions to $40,000 for five years, much higher than previously allowed. (Olivianna Calmes / Fox News)

There is also a provision within the OBBBA for the “permanent enhancement” of the Low-Income Housing Tax Credit (LIHTC).

It brought the state allocation ceiling a 12% increase for such rental housing while also making the benchmark for bond-financing down lower, according to reports. 

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According to Stauffer, the permanent enhancement of the LIHTC “could be a tool to help” with America’s lack of affordable housing that has put pressure on home prices. 

“It gives developers a reason to build affordable housing by making the economics work,” she told FOX Business. “If…