How the BBBA Impacts Real Estate Owners in California and Washington

The Big Beautiful Bill Act (BBBA)—or whatever you choose to call it—just dropped some tax updates that homeowners and real estate professionals across Southern California and Washington need to understand. Whether you’re buying, selling, investing, or simply owning real estate, there are several tax-related benefits that could positively impact your bottom line.

Here’s what stood out:

1. Mortgage Insurance Write-Offs Remain
   If you put down less than 20% on your home and are paying private mortgage insurance (PMI), good news: you can still write it off on your taxes. This deduction was previously set to expire but has now been made permanent.
2. Mortgage Interest Deduction Preserved
   You can still deduct interest on mortgage balances up to $750,000. In high-cost areas like Los Angeles, Orange County, and Seattle, this is critical for buyers stretching into jumbo loan territory.
3. SALT Deduction Expansion
   The State and Local Tax (SALT) deduction cap was raised, making itemizing more appealing—especially if you’re paying $15K+ in state income tax and another $12K+ in property taxes. This change could make a meaningful difference when tax time rolls around.
4. 1031 Exchanges Survive
   Real estate investors, rejoice: 1031 tax-deferred exchanges are still allowed. If you’re selling and reinvesting in new property, this powerful tool for deferring capital gains remains untouched.

Takeaway for Real Estate Pros and Owners:
These updates may seem small individually, but collectively, they offer real savings and planning opportunities—especially in higher-cost markets. Now’s the time to have an in-depth conversation with your CPA or financial advisor to leverage these changes.