New Hampshire has no income tax but the property tax burden is significant. The federal SALT deduction cap increase from $10,000 to $40,000 will relieve some homeowners. Only 0.8% of homeowners will have property tax bills exceeding $10,000 under the new cap. This change benefits households in high-cost areas and allows for better deductions. Many residents previously limited by the cap will now gain advantages from both SALT and mortgage interest deductions. The SALT cap remains a contentious issue in discussions about tax policy.
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, they were not able to deduct the full amount like residents in low-tax states.
Given that the state doesn't collect income tax, many of the homeowners impacted in the state live in higher-cost towns in southern New Hampshire, where home values have appreciated sharply over the last decade.
The early beneficiaries of the new law will be homeowners who have a mortgage and pay significant property taxes. These households can now benefit from both an increased SALT deduction and the mortgage interest deduction.
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