Big Beautiful Bill: What Homeowners and Real Estate Investors Need to Know About 2025 Tax Changes

Every day, we connect with people at different stages of the homeownership journey—from first-time buyers to seasoned investors. And lately, many of those conversations have turned to the new federal tax bill, playfully dubbed the “Big Beautiful Bill.”

Whether you’re buying your first home, currently own property, or helping a loved one build a foundation, here are a few ways these new changes might affect you—and how they could help you make the most of your real estate journey.

The SALT Deduction Just Got a Major Boost

Back in 2017, the deduction for state and local taxes (SALT) was capped at $10,000. That cap has now been raised to $40,000 for households earning up to $500,000.

What does that mean in real terms? At a 35% marginal tax rate, that’s up to $10,500 in yearly savings—or about $875 a month. That’s the equivalent of covering the monthly payment on $135K of mortgage. A meaningful shift for many.

A quick note for couples: The $500K income cap applies whether you're married or not. It might not be romantic to say, but in some high-income situations, staying single could have tax advantages.

Mortgage Insurance Is Tax-Deductible Again

After an eight-year hiatus, mortgage insurance (MI) is back on the list of deductible expenses—especially helpful for buyers putting down less than 20%.

If you itemize (which more of us now will, thanks to the higher SALT cap), MI becomes a 22–37% discount depending on your tax bracket. That’s real affordability power for those working to get into their first home.

Gifting Just Got More Generous

Supporting the next generation has always been close to our hearts. The updated gift tax exemption means you can now give up to $15M tax-free over your lifetime (or $30M for couples).

While the annual gift cap of $18K per person remains, this change offers families and loved ones more flexibility in passing down wealth or lending a hand—without complicated tax consequences.

Bonus Depreciation Is Back—for Homeowners and Investors

For our investor clients, this is a big deal: you can now fully write off improvements (like HVAC systems, appliances, flooring) in year one.

But this isn’t just for investors. Real estate professionals and business owners can also write off equipment like laptops, smartphones, scanners—even your next vehicle—if it’s used 50% or more for work.

What Stayed the Same—And Still Matters

 While there’s a lot of change, a few important things stayed the same:

• The mortgage interest deduction on loans up to $750K is still in place.

• 1031 exchanges remain available for deferring capital gains on investment properties.

• The $250K/$500K capital gains exclusion on the sale of a primary residence still applies.

 (Fun fact: If adjusted for inflation since 1997, that exclusion would now be closer to $480K/$960K.)

Final Thoughts

These changes can feel like a lot to take in—but they offer real opportunities to create more flexibility, affordability, and generational support in how we buy, sell, and own homes.

If you're curious how this might impact your real estate plans, we're here to help you navigate it all. You can contact us at anytime. And when it comes to the tax side of things, we always recommend speaking with a licensed professional—and we’d be happy to connect you with a trusted expert in our network.