What the One Big Beautiful Bill Act Means for Homeowners: A Breakdown of SALT Changes

Understanding the One Big Beautiful Bill Act

When can you almost guarantee people will take a vested interest in new legislation? Anytime those policies directly impact their wallets. The most recent string of laws to do so came in the form of the One Big Beautiful Bill Act (OBBB), which went into effect in July of 2025.

Among other things, the bill includes several provisions that change the way you can reduce the amount of taxes you owe at the end of the year—particularly when it comes to SALT deductions. And they’re something every homeowner in the tri-state area needs to be aware of!

In this blog, we’ll break down:

• What SALT deductions are

• How the OBBB changes these deductions

• Who qualifies for these deductions

• What you need to keep in mind to reap the benefits

  
  

What are SALT Deductions?

In this case, SALT stands for state and local taxes. Deductions under this category aim to help you avoid double taxation within your federal tax liability by excluding income already taxed for state and local government services.

What Counts as SALT Deductions?

State and local taxes fund local programs such as public education, first responders, and other community services. As a result, deductions can only be made from the money you pay that funds these programs.

That means you can claim SALT deductions from one of two categories: property tax and income/sales tax. (Unfortunately, you can't itemize deductions from both categories. You have to choose.)

The category you choose will depend on the state you live in and what liability requires you to pay higher taxes. Since New York, New Jersey, and Connecticut are infamous for their high property taxes, especially in Long Island’s Nassau and Suffolk counties, most tax filers here opt to claim deductions there.

What Does Not Count as SALT Deductions?

You cannot claim deductions from any tax liability or expense that does not contribute to state and local programs. 

For example, the following categories won’t apply under SALT deductions:

• Federal income taxes

• Social Security taxes

• HOA fees

• Estate or inheritance taxes

• Fees for things like water or trash collection

  
  

Who Qualifies for SALT Deductions?

Anyone who lives in a state with high property or income/sales taxes can take advantage of SALT deductions. While this change in the deduction cap will more heavily impact high-income tax filers, who tend to pay more in state income tax, it also will give those who live in areas with higher property taxes a bit of breathing room.

Long Islanders and people in the tri-state area, you bet that means you!

How Do SALT Deductions Change Under the One Big Beautiful Bill Act?

Previously, you could only claim SALT deductions up to $10,000 per tax year. When the OBBB took effect, it increased that cap.

As of 2025, individuals and couples making up to $500,000 can now claim $40,000 of SALT deductions each year. For those making over $500,000, the cap decreases by 30% until you make $600,000, at which point you’ll only be able to claim the original $10,000.

The cap will increase by 1% per year through to 2030, when it will revert to $10,000 with no income limits.

This is a big deal for those who qualify for SALT deductions. 

The Power of SALT Deductions

Using Long Island as an example, in 2022, the average property value for a house in Nassau County was $821,271, with an average property tax of 2.24%. The average property value of a house in Suffolk County was $700,199, with an average rate of 2.37%.

That makes for an annual property tax liability of around $18,400 in Nassau County and $16,600 in Suffolk County. Under the previous laws that only allowed for a $10,000 deduction, homeowners would still be liable for $8,400 and $6,600, respectively.

However, under the OBBB, filers can deduct the entire amount from their federal liability and bring that number to zero!

How Do I Take Advantage of SALT Deductions?

In order to take advantage of SALT deductions, you need to itemize the deductions you include on your tax filings. In doing so, you forfeit the ability to take standard deductions, which tends to be a more common practice.

Since itemized deductions tend to require receipts for proof of legitimacy, you'll need to be careful when claiming these amounts on your tax return. Plus, you want to make sure that you are taking advantage of every deduction under this category possible. That's when using an experienced CPA makes all the difference.

Claim Every Deduction with AVM DeMars

At AVM DeMars CPAs LLC, our experienced Long Island and Tri-State area tax experts have the knowledge needed to successfully find every opportunity to lower your property taxes and minimize tax liability.

We act as your dedicated advocate, not just your accountant. Don’t wait until tax season is just around the corner. Contact our team today to get started!