President Donald Trump signed the One Big Beautiful Bill Act into law on Jul. 4. The legislation will have sweeping ramifications for the country and the economy, with major implications for law enforcement, taxes, immigration and social welfare programs.
Trending Now: Trump Wants To Eliminate Income Taxes — Here’s What That Would Mean for the Economy and Your Wallet
Read Next: 5 Types of Cars Retirees Should Stay Away From Buying
However, those looking to buy their inaugural house are likely to be more interested in a trio of provisions that could impact first-time homebuyers. Here’s what’s on the horizon for them.
SALT Deduction Cap Temporarily Raised
According to Fidelity, the bill raises the state and local tax (SALT) deduction to $40,000 for those earning less than $500,000 per year. It was capped at $10,000 in 2017 and will revert to a $10,000 maximum deduction in 2030, but for now, it quadruples the deductible amount of property and other taxes.
AD Mortgage said this is especially helpful to buyers in high-tax states, such as New York, New Jersey, California, Connecticut and Illinois, and to borrowers taking out jumbo or conforming loans, high balance loans and non-qualified mortgages.
Learn More: Can You Write Off Your Home Insurance on Your Taxes?
Tax-Exempt Savings Accounts Established
Aspiring first-time homebuyers with families can hit the ground running with the so-called “Trump accounts” the bill creates. According to the Tax Foundation, they’re a new kind of tax-exempt savings account for children that parents, relatives and others can contribute to for a maximum of $5,000 per year to grow tax-free until the minor turns 18. Babies born in the next four years get a $1,000 government-funded contribution. The accounts are for qualified expenses only, including the first-time purchase of a principal residence.
Mortgage Interest and PMI Deductions Made Permanent
National Mortgage Professional said the legislation also permanently restores two key benefits for first-time buyers and many veteran homeowners alike.
- It permanently restores private mortgage insurance (PMI) as a deductible expense for buyers who put less than 20% down. According to U.S. Mortgage Insurers, first-time buyers account for 65% of PMI policies.
- Additionally, the bill makes permanent the deductibility of mortgage interest on home loans of up to $750,000, a cap that remains unchanged.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
- I'm a Realtor: This Is Why No One Wants To See Your Home
- 3 Things Retirees Should Stop Buying To Save Money Amid Tariffs
- 3 Reasons Retired Boomers Shouldn't Give Their Kids a Living Inheritance (And 2 Reasons They Should)
- The New Retirement Problem Boomers Are Facing
This article originally appeared on GOBankingRates.com: 3 Ways First-Time Home Buyers Could Benefit From the ‘Big, Beautiful’ Bill
