The One Big Beautiful Bill fundamentally reshapes the tax picture for homeowners in 2026, most dramatically by raising the SALT deduction cap to $40,000 from $10,000. This provides major relief for high-tax states like New York and Texas, though it phases out for incomes above $500,000. However, the high standard deduction—now $6,000 extra for seniors—means fewer filers will itemize to claim these benefits.

Mortgage interest remains a key break, but the $750,000 loan limit persists for deducting interest on primary mortgages and HELOCs, provided the latter funds home improvements. Private mortgage insurance becomes deductible in 2026 only. The calculus to itemize is tougher, as CPA John G. Adams notes it only benefits those with large charitable gifts or medical expenses alongside mortgage interest.

Capital gains get a boost with the $500,000 exclusion for married couples on primary residence profits. Yet, several popular breaks are gone: energy credits for solar panels expired after 2025. For most, the tangible advantage lies in long-term cost basis increases from capital improvements, not immediate deductions. The new law ultimately favors itemizers with significant home-related expenses and high state taxes, a narrower slice of the market than before.