What the New SALT Cap Means (and Doesn’t Mean) for NYC Homeowners

The latest federal tax changes under the Trump administration’s “One Big Beautiful Bill Act” have raised the cap on the SALT deduction—that’s State and Local Taxes—for those who itemize their returns. If you live in New York, where taxes are no joke, that might sound like a big deal. The cap jumped from $10,000 to $40,000 for qualifying taxpayers, and it’ll slowly tick up by about 1% a year until 2029 before reverting back to $10,000 in 2030.

A Nice Boost for Homeowners (But Don’t Expect a Market Shift)

That means some homeowners can write off up to $30,000 more on their federal returns. But will that translate to a noticeable shift in our local real estate market? Probably not.

While the extra write-off could help an individual buyer here or there—especially co-op buyers where every bit helps—it’s not the kind of change that’s going to drive serious market momentum. We’re not seeing buyers jump off the sidelines because of it. In fact, most of our clients aren’t even bringing it up in conversation.

Why Higher Earners Won’t See Much Benefit

For New Yorkers earning under $500,000, this adjustment may make itemizing deductions a bit more appealing. But once your income crosses that $500K line, the benefits phase out quickly. A 30% reduction kicks in, and before long you’re back at the old $10,000 cap. Which is why a lot of higher-income folks have already shifted to workarounds like the Pass-Through Entity Tax (PTET)—a mechanism that gives business owners a tax credit on their personal income returns.

SALT Cap Frustration Isn’t New

None of this is new, exactly. The original SALT cap from the 2017 Tax Cuts and Jobs Act has been frustrating New Yorkers for years. That cap was a financial hit to many of our local homeowners, and while this temporary raise is something, it’s not game-changing. It’s also not permanent.

What Would Move the Needle? Eliminating the Cap Entirely.

There was a push during the bill’s negotiation to eliminate the cap entirely. And if that ever does happen, it would be a much bigger story. In fact, NYC Comptroller Brad Lander estimates that fully removing the SALT cap could save New Yorkers around $7.5 billion in federal taxes—money that could absolutely reshape housing budgets, especially for those looking to move up the property ladder or invest in multi-family buildings.

A Band-Aid, Not a Solution

But as it stands, this latest SALT update feels more like a Band-Aid than a fix. It helps a bit. It may give some buyers or owners a little breathing room. But it’s not going to cool the market, and it’s not going to push it forward either.

What This Means for You

If you’re already in the market to buy or sell, it’s a small bonus—nothing more. At Realty Collective, we’ll always walk you through these updates with clarity and context, not just headlines. And while we don’t give tax advice, we can definitely connect you with trusted professionals who do.

Have Questions?

Got questions? Reach out anytime. We’re here to help you stay grounded and make smart, confident decisions—SALT deduction or not.

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