How New Tax Laws Could Affect Homeownership This Year

1. State & Local Tax (SALT) Deduction Expansion

After years of strict limits, the SALT deduction cap has been significantly raised. Thanks to the One Big Beautiful Bill Act (OBBBA), homeowners can now deduct up to $40,000 in state and local taxes (from the previous $10,000 limit) for tax years 2025–2029 Lucas Real Estate Group+10CAPTRUST+10Realtor+10.

What This Means for You: Homeowners in high-tax states (like New York, California, or New Jersey) or with sizeable property-tax bills could see meaningful boosts in tax savings—potentially freeing up more budget for mortgage or maintenance costs Kiplinger.

2. Mortgage Interest and Home Equity Loan Updates

OBBBA also made key real estate deductions more permanent:

• The $750,000 mortgage interest deduction for primary and second homes continues.

• Home equity loan interest remains deductible if used for home acquisition or improvement The Scottish Sun+15SSB CPA Blog+15Griffin Funding+15.

Takeaway: Buyers with large or financed purchases retain important tax benefits in 2025.

3. Bonus Depreciation Beyond Residential Real Estate

For investors, 2025 brings a golden opportunity. The OBBBA restored 100% bonus depreciation for qualifying assets—this allows investors to write off upgrades like appliances or fixtures immediately, boosting cash flow and after-tax returns CBH+2Griffin Funding+2.

4. Energy Efficiency Tax Credits, but They're Temporary

Homeowners can still benefit from federal credits for energy-saving upgrades in 2025. You could save up to $3,200 on qualified investments like solar panels, efficient windows, or heat pumps energystar.gov+1. However, these incentives expire after 2025, so acting now is key turbotax.intuit.com.

5. Capital Gains & Home Sale Tax Policy—Potential Shift

Currently, homeowners can exclude $250,000 (single) or $500,000 (married) of profit when selling a primary residence. The More Homes on the Market Act proposes doubling these exclusions and tying them to inflation to encourage market fluidity nar.realtor+1.

Status: Not law yet, but worth watching—especially if you plan to sell soon.

6. Tax Timing and Market Behaviors

Changes in tax laws often spur market movement. Buyers and sellers strategically time transactions to take advantage of better tax treatment—this can lead to surges in listings or competition near effective dates Griffin Funding.

Summary Table

Tax Law Update	What It Means for Homeowners
Expanded SALT cap	More deductibility and savings in high-tax areas
Mortgage & home equity deductions extended	Continued tax benefits for financing homes
100% bonus depreciation	Investors save more and reinvest faster
Energy credits ending	Act now to maximize savings before expiration
Potential capital gains reforms	Future sellers may get bigger exemptions
Timing market impact	Expect market movement around tax deadlines

Final Thoughts

2025 brings meaningful tax changes for homeowners—from higher deductions to expiring credits. Whether you're buying, selling, or investing, understanding how these shifts impact your affordability and timing can lead to smarter decisions and potentially big savings.