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The dust has settled on the One Big Beautiful Bill Act, and the tax landscape for homeowners looks quite a bit different than it did a year ago.
Some provisions expired while others expanded, and a few long-debated rules are now permanent. What’s less clear is who actually benefits from these changes — and who doesn’t.
To make sense of it all, NewHomeSource, a new home listings site with customer reviews, spoke with Keith Schroeder, a Wisconsin-based tax expert who runs The Wealthy Accountant blog, to break down the most important changes for homeowners in 2026.
Note: These changes affect returns filed in 2026 for the 2025 tax year, unless otherwise noted.
SALT deduction increases
“The biggest change benefiting homeowners for 2025 is the state and local tax deduction,” Schroeder said. “Since 2018, SALT was limited to $10,000. That increases to $40,000 in 2025.”
For homeowners in high-tax states, this is the most important headline.
In 2026, the cap rises to $40,400 and will climb 1% annually through 2029 before reverting to $10,000 in 2030.
However, how much you can actually deduct depends on your situation.
“This is not a straight $40,000 for every homeowner,” Schroeder said. “This is a deduction up to $40,000 for combined SALT, including things like income taxes, real estate property taxes, and personal property taxes.”
It’s also important to note that not all homeowners will benefit from the higher SALT cap. Many households take the standard deduction rather than itemizing, meaning the expanded SALT limit may not affect their tax bill at all. Renters and lower-income homeowners are also less likely to see direct benefits from this change.
For homeowners who don’t itemize — or whose deductions don’t exceed the standard deduction — the higher SALT cap may be largely irrelevant.
PMI is deductible again
Private mortgage insurance premiums (PMI) are tax-deductible again starting in 2026. This deduction had expired after 2021 and has now been revived under the new tax law; PMI will now be treated as deductible mortgage interest.
To qualify, adjusted gross income must be below $100,000 for single and joint returns, with the deduction phasing out completely at $110,000. When the deduction was last available, qualified homeowners received an average deduction of about $2,364.
This primarily affects conventional-loan buyers who put down less than 20% and are required to carry PMI. FHA mortgage insurance premiums are treated differently and do not qualify under the same rules.
If you are a first-time buyer stretching a bit and carrying a PMI, this could help. It won’t change the world, but it can take a bit of the sting out of your monthly payment.
The $750,000 mortgage interest limit is permanent
The mortgage interest deduction limit, which dropped from $1 million to $75