How The “Big Beautiful Bill” Could Impact You as a Homeowner, Buyer, or Investor
As you may have seen in the headlines, the “One Big Beautiful Bill” Act has officially passed into law. While the name itself sparked plenty of conversation, what matters most are the real, practical ways this bill could affect your finances and real estate goals in the years ahead.
We’ve taken the time to review the updates and distilled the most relevant points for our community here on the Westside and beyond.
For Buyers and Homeowners
Mortgage Insurance is Now Permanently Tax-Deductible (Subject to Income Caps)
If you’re buying with less than 20% down and paying private mortgage insurance (PMI) or mortgage insurance premiums (MIP) on FHA, VA, USDA, or conventional loans, you’ll now be able to deduct those payments permanently. However, this deduction begins to phase out at $100,000 of income for married couples and $50,000 for single filers.
Why it matters: This creates meaningful long-term savings, making low-down-payment options more affordable for buyers who want to enter the market sooner rather than later.
Mortgage Interest Deduction Limit Locked in at $750,000
The cap on how much mortgage interest you can deduct is now permanently set at $750,000.
Why it matters: In higher-priced markets like Los Angeles, this clarity can make financial planning around buying or refinancing far more predictable.
State and Local Tax (SALT) Deduction Increase (2025–2029)
From 2025 through 2029, the state and local tax deduction limit will rise from $10,000 to $40,000 for many households. This benefit begins to phase out at $500,000 of income.
Why it matters: This is a substantial tax benefit for homeowners in high-tax states like California, making homeownership more financially friendly over the next few years.
For Sellers and Investors
20% Tax Deduction for Rental Income is Now Permanent
Real estate investors can continue deducting 20% of their rental income indefinitely.
Why it matters: This helps improve cash flow and overall returns, creating more stability and making rental property ownership even more attractive.
Interest Deductions for Investment Properties Remain
Investors can still deduct interest on loans tied to their real estate investments.
Why it matters: Especially in today’s higher interest rate environment, this supports investor demand and profitability.
1031 Exchanges and Capital Gains Rollovers Stay Intact
The bill leaves in place rules allowing investors to defer taxes by reinvesting profits into new properties.
Why it matters: This continues to encourage portfolio growth and gives sellers options to transition into new investments without immediate tax penalties.
What This Means For You
While this bill includes tax changes and investment provisions that will affect homeowners and investors, it’s important to remember that every law comes with broader impacts—some positive, some more complex. Our focus is to ensure you stay informed about the aspects that may directly influence your real estate goals and financial planning.
As always, we’re here to provide honest guidance as you navigate your options, whether that means buying, selling, investing, or simply staying up to date on the market.
If you want to discuss how these updates could fit into your plans, let’s connect. No pressure—just clarity for your next steps.
