Illinois homeowners face high property taxes, but the increase in the SALT deduction cap from $10,000 to $40,000 may alleviate some of this financial burden. Previously, 14.7% of homeowners had tax bills over $10,000, but only 1.1% are expected to exceed the new limit. This change primarily benefits middle and upper-middle-income households who can now find itemizing deductions more advantageous. Longtime homeowners and those with mortgages are set to gain significant relief, potentially influencing housing choices towards affluent, high-tax neighborhoods.
Residents of high-tax states suffered the most with the previous cap on state and local taxes (SALT), because their taxes far exceeded the cap.
The early beneficiaries of the new law will be homeowners who have a mortgage and pay significant property taxes, benefiting from higher tax deductions.
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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