California homeowners will see financial relief with the new $40,000 cap on state and local tax deductions, down from a previous $10,000 limit. Previously, 20.2% of homeowners could not deduct their full property tax burden; this number is now expected to drop to 1.8%. Cities like San Jose and San Francisco will experience the most significant impacts. The adjustment will particularly help middle-class families and long-time homeowners, while also incentivizing home buying in high-tax neighborhoods such as affluent suburbs with good schools.
"Residents of high-tax states suffered the most with the previous cap on state and local taxes. Because their taxes far exceeded the cap, they were not able to deduct the full amount like residents in low-tax states."
"The early beneficiaries of the new law will be homeowners who have a mortgage and pay significant property taxes."
"Raising the SALT cap creates a greater incentive to own in expensive, high tax neighborhoods, such as affluent suburbs with high property taxes and good schools."
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