Congress has approved a new $40,000 cap on state and local tax (SALT) deductions, offering potential relief for homeowners in high-tax states. Previously, a $10,000 cap imposed by the 2017 tax law left many homeowners, especially the middle class, unable to deduct their full property tax liabilities. This change is expected to impact housing decisions across America, as it may influence where individuals and families choose to live. The cap’s increase could also alter the perception of high-cost states and encourage homebuyers to consider them more seriously.
The 2017 tax law placed a hard ceiling on SALT deductions at $10,000, leaving many homeowners in high-tax states unable to fully deduct their property taxes.
Congress has approved a new $40,000 cap on SALT deductions, which could bring significant financial relief to homeowners in high-tax states.
As home values soared, many middle-class homeowners found themselves paying property taxes exceeding $10,000, which they were unable to deduct, affecting overall affordability.
The new SALT cap may influence decisions on where Americans choose to live and could cause some buyers to reconsider states they previously deemed too expensive.
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