H.R. 1, nicknamed the Big Beautiful Bill, is now law and its tax provisions effect your real estate. Of paramount importance to millions of homeowners is that the mortgage interest deduction has been permanently extended – up to a $750,000 cap. Previously excluded from the deduction was mortgage insurance premiums (PMI). Now PMI is treated like mortgage insurance and is deductible from your federal taxes up the combined total $750,000 limit. The mortgage interest deduction (and now the addition of the PMI deduction) makes residential real estate more affordable, so its preservation was critical. The BBB also quadrupled the state and local tax (SALT) deduction cap to $40,000 per house for five years. And there is good news if you own investment properties and qualify for the 20% deduction for Qualified Business Income – this tax break has also been made permanent.
