You may have heard some buzz about a new federal bill (nicknamed “The Big Beautiful Bill”) that recently passed—especially if you’re buying or selling a home. I’ve had several clients ask how it affects them, so I want to break it down in a clear, apolitical way. These changes start in 2025 and could make a meaningful difference, especially here in higher-priced areas like Ventura and Santa Barbara Counties.
As your local real estate guide in Ventura and Santa Barbara, I believe in breaking things down without the noise—so you can make smart, informed decisions. Whether you’re thinking of buying, selling, or just staying informed, understanding these updates can help you maximize savings and plan wisely.
Want to know how these changes apply to your unique situation? Let’s connect.
🏠 4 Key Housing Changes You Should Know:
1. PMI Is Now Deductible (Forever!)
Private Mortgage Insurance (PMI)—which many folks pay if they put less than 20% down—wasn’t always deductible. In fact, it sunset in 2021. This new legislation brings it back and makes it permanent.
✅ Applies to FHA, VA, and conventional loans with PMI
✅ Full deduction for incomes up to $100,000/year
✅ Phased deduction for incomes up to $109,000+
If you’re buying with less than 20% down, this could save you hundreds each year.
2. Mortgage Interest Deductions Stay (With Limits)
In 2017, mortgage interest deductions were capped at loans of $750,000 per couple ($375K for singles). This was set to expire in 2025. Now, it’s here to stay indefinitely.
⚠️ Note: There’s no inflation adjustment—so while it helps, the cap may be felt more in high-cost areas like ours.
3. 1031 Exchanges Survive (With a Twist)
Great news for investors: 1031 exchanges are staying put—but with a bonus. You now get accelerated depreciation in Year 1 rather than spreading it out.
Translation: Bigger tax benefits upfront when you swap investment properties.
4. Pass-Through Income Deductions Extended
If you’re a self-employed buyer or run a business (LLC, S-corp, sole proprietorship), you can still deduct up to 20% of qualified business income. This can help with mortgage qualification and taxable income planning.
Here’s a quick example:
🏡 $1M home | 💰$150K income | 💸 $17,500 in property + state taxes
➡ This change could equal $1,000/year in savings for many.
