If you own a home in California — or are thinking about buying or selling — 2025 just brought you some great news. The federal government has raised the SALT deduction cap to $40,000, and the newly signed One Big Beautiful Bill Act (OBBBA) delivers a wave of homeowner-friendly tax benefits.

Combined with historic insights into mortgage interest rates over the years, this creates powerful opportunities for homeowners, buyers, and real estate investors.

SALT Deduction Increased to $40K: A Big Win for California Homeowners

California’s high property taxes have long made the $10,000 SALT deduction cap a pain point. Starting in 2025, homeowners can now deduct up to $40,000 in state and local taxes — quadruple the old cap.

Here’s why it matters:

• Under the old cap, 20.2% of CA homeowners couldn’t deduct their full property tax bill.

• With the new cap, only 1.8% fall short.

• Private Mortgage Insurance (PMI) premiums are once again tax deductible — saving newer homeowners even more.

Source: Realtor.com, National Association of REALTORS®

👉 Want expert guidance on whether to rent or sell?

Text or Call (626) 727-9481 for your personalized side-by-side comparison

The One Big Beautiful Bill Act (OBBBA): New Tax Benefits for Homeowners & Investors

Signed on July 4, 2025, the OBBBA introduces tax and spending changes that directly impact the real estate market.

Key Benefits:

• Permanent 2017 tax cuts → more certainty for households

• $40K SALT deduction cap → relief for high-tax states like CA

• Tax deduction for overtime & tips → more take-home pay for buyers

• Permanent business expensing → major savings for property upgrades and real estate investors

• Deductible PMI premiums → reduces taxable income for first-time buyers

Who Benefits Most?

• Homebuyers: More buying power with reduced taxable income

• Homeowners/Sellers: A larger pool of qualified buyers

• Real Estate Investors: Bigger deductions and long-term policy certainty

Thinking of buying, selling, or investing under these new rules? Schedule a strategy session with our team so you don’t miss out on these tax benefits.

Interest Rates Over the Years: Lessons from History

Mortgage interest rates have always moved in cycles. From 3.5% in 1955 to a staggering 16.63% in 1981, history shows that rates rise and fall — but real estate remains one of the most reliable wealth-builders.

The takeaway? Don’t wait for the “perfect” rate. A smart buying or selling strategy works in any market.

📥 Check out our full Interest Rates Over the Years chart below: