New Trump Tax Bill: Five Changes Homeowners Need to Know Now

The One Big Beautiful Bill (OBBB)—Trump’s newly passed tax legislation—is shaking up the landscape for U.S. homeowners. While some changes bring welcome relief, others could hit your wallet hard, especially if you’re considering home improvements or investing in real estate.

Here are the five biggest takeaways every homeowner and real estate investor needs to know right now.

1. Last Chance for Energy-Efficient Tax Breaks ⚡

Thinking of going solar? You’ll need to act fast.

The Residential Clean Energy Credit and Energy Efficient Home Improvement Tax Credit, both expanded under the Inflation Reduction Act, are now set to expire on December 31, 2025—nearly a decade earlier than planned.

✅ Homeowners can still claim up to $3,200 in tax credits for upgrades like insulation, windows, and HVAC systems.
✅ Solar panels, wind turbines, and geothermal systems are still eligible for a 30% credit—but only through 2025.

After that, those savings vanish. For many families, that could mean $600+ higher annual energy bills.

2. SALT Cap Quadruples to $40K 💰

One of the biggest wins for homeowners in high-tax states: the state and local tax (SALT) deduction cap is temporarily raised to $40,000 for households making under $500,000.

That’s a big jump from the $10,000 cap set under Trump’s 2017 tax reform.

📌 Effective for tax years 2025–2029
📌 Phased 1% increase each year
📌 Potential savings of tens of thousands for homeowners in states like New York, California, and New Jersey

For many middle-income households, this provision provides serious breathing room.

3. Mortgage Interest Deduction is Permanent 🏡

Good news: the mortgage interest deduction on loans up to $750,000 is now permanent.

This not only benefits homeowners but also supports housing demand by keeping ownership costs lower.

Key updates include:

• PMI premiums count as mortgage interest, helping borrowers with smaller down payments.

• HELOC interest is deductible—but only if the funds are used for buying or improving your home.

For real estate investors, this stability means long-term predictability in tax planning.

4. Expanded Affordable Housing Tax Credits 🏢

The OBBB doubles down on affordable housing by expanding the Low-Income Housing Tax Credit (LIHTC).

• States’ annual allocations rise from 9% to 12% starting in 2026

• Bond financing threshold drops from 50% to 25%, making deals easier to close

For developers and investors, this opens the door to more tax-advantaged projects in the affordable housing sector—a huge opportunity in today’s undersupplied rental market.

5. Tariffs Could Push Housing Costs Higher 📈

Finally, the not-so-great news: tariffs.

New tariffs on steel, aluminum, and Canadian softwood lumber could increase the cost of building and remodeling homes. Retailers like Home Depot already announced price hikes, with Lowe’s warning that increases may follow.

The National Association of Home Builders (NAHB) has warned that tariffs could add thousands to the cost of a new home.

For homeowners, this means renovations may cost more. For buyers, it could keep new construction prices climbing.

Bottom Line: What This Means for Homeowners

Trump’s “big beautiful bill” brings a mixed bag:

✔ More generous SALT deductions
✔ A permanent mortgage interest deduction
✔ Expanded affordable housing incentives

But also:

✘ A shorter window for clean energy tax breaks
✘ Higher building and renovation costs from tariffs

📢 Call to Action

If you’re a homeowner or investor, the key is timing and strategy:

• Act quickly on energy-efficient upgrades before credits disappear.

• Plan ahead for SALT deduction opportunities if you’re in a high-tax state.

• Watch tariffs when budgeting for construction or remodels.

👉 Want tailored advice for your homeownership or investment strategy under the new tax law? Let’s connect—I can help you navigate these changes before they impact your bottom line. Melissa Johnson 561-325-0012.