Some homeowners could see tax breaks if Trump's bill passes
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Real estate brokers are cheering a provision in President Trump's "big, beautiful bill."
Why it matters: Expanding the state and local tax (SALT) deduction could be boon for homebuyers in expensive areas where taxes run high.
How it works: The latest version of the legislation proposes to raise the deduction cap from its current $10,000 a year limit to $40,000 for five years.
- Homeowners with relatively high incomes and steep property taxes especially stand to save.
Catch up quick: A group of Republican lawmakers from blue states with high taxes led the charge.
- Before 2017, when Trump signed his first-term taxes into law, people could deduct all state and local taxes from their federal bills.
The big picture: Property taxes have soared nationwide in recent years.
- The top states with the most properties taxed at $10,000 or more annually are New Jersey (39.9%), New York (25.9%), Connecticut (19.4%), California (19.3%) and Massachusetts (18.4%), according to a report from Realtor.com.
What we're hearing: The National Association of Realtors previously cheered the SALT push as a key win for real estate.
Case in point: In property tax-heavy Texas, buyers might spring for roomier or flashier houses knowing bigger tax breaks await, says Eric Bramlett, who owns an Austin brokerage.
- That could free up inventory for other house hunters.
- "The accountant's desk will be the first domino, and open house traffic will be the next," Bramlett tells Axios.
Between the lines: Sky-high housing costs are making it hard for many homebuyers to find a place they can afford.
- Economic uncertainty is also sidelining some shoppers.
Reality check: Not everyone pays tens of thousands of dollars in state and local taxes.
- A SALT cap increase like the one moving through Congress "would have the most impact on homeowners in high-tax states and in high-dollar homes," said Realtor.com senior economist Joel Berner in the report.
What's next: The House and Senate, which have passed different versions of Trump's sweeping bill, must quickly approve the same version to meet the president's July 4 deadline.
