SALT Deduction Law – Key Points for California Homeowners

Beginning with the 2025 tax year, the federal SALT deduction cap increases from $10,000 to $40,000 for taxpayers earning under $500,000 annually. The higher cap remains in effect through 2029, increasing by 1% each year, before reverting to $10,000 in 2030.

For Bay Area homeowners, this change is significant because property taxes in many high-cost neighborhoods often exceed $10,000. As a result, more homeowners may be able to deduct the full amount of their property taxes on their federal tax returns, providing meaningful tax relief.

Other potential homeowner tax deductions may include mortgage interest, qualifying home improvements, EV charging equipment installations, and renovations made for medical needs.

SALT Dedictions Explained

Tax Breaks