08/01/2025
Hi , you all received the Item of Value Letter in your email today, which you can either email or post on your business or personal page. It is very informative on real estate tax changes that are important for homeowners and investors. This is the email you received:
Real Estate Deductions for the Year Ahead
Real estate is ever-changing, as are legal policies and tax laws. Last month brought the passing of the “One Big Beautiful Bill Act,” and with it comes a few key new (and renewed) real estate-related tax deductions. These are more than tax changes: they’re reminders of how real estate remains one of the most powerful tools for building long-term wealth and financial independence.
State and Local Taxes (SALT) Deduction. Homeowners can deduct up to $40,000 in state and local taxes (previously $10,000). This is especially helpful in areas with high property taxes and applies to property taxes on your primary residence, a vacation home and undeveloped land.
Mortgage Interest Deduction. The existing $750,000 mortgage interest deduction limit is now permanent, allowing homeowners to deduct interest paid on the first $750,000 of their mortgage debt. Higher limits ($1 million) remain in place for mortgages that closed before Dec. 14, 2017.
Mortgage Insurance Premiums (PMI) Deduction. Homeowners can once again deduct mortgage insurance premiums, also known as PMI, on their taxes. PMI is generally required when a home buyer makes a down payment of less than 20%.
Incentives for Real Estate Investors. Bonus depreciation and Qualified Business Income deductions have been made permanent—both valuable benefits for investors. Additionally, 1031 exchanges, which allow investors to defer capital gains when they exchange one like-kind property for another, remain in place.
Now’s the time to evaluate if your current real estate setup aligns with these advantages. As always, please consult your tax advisor for details on how these and other tax deductions may apply to you.
If you’re curious about your property’s current value or have any other real estate-related questions, please reach out. With my team at Long & Foster Real Estate, I can bring together everything and everyone you need—mortgage, title, insurance, inspection, moving and more. It’s the One!
Enjoy the rest of your summer!
