What the “One Big Beautiful Bill Act” Means for You in 2025
Big things are happening… and they’re looking pretty beautiful for homeowners, buyers, and real estate professionals alike.
The recently passed One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brings with it several major tax updates. While the name might sound flashy, the benefits are very real—especially if you’re buying, selling, investing, or helping others do the same in high-cost areas like Santa Barbara.
Here’s what you need to know:
1. 2017 Mortgage Interest Deduction Made Permanent
The mortgage interest deduction (originally capped at $750,000 back in 2017) is now permanent. No more wondering whether it’ll expire next year. It’s locked in.
Why it matters:
Buyers can continue writing off interest on new mortgages up to $750K. That’s a big win, especially for higher-price-point homes here in Santa Barbara. It also makes financing more attractive than paying all-cash in some cases.
2. Standard Deduction Increases (Seniors Win Even More)
The standard deduction is getting a bump in 2025:
- $15,750 for individuals
- $31,500 for married couples filing jointly
And for folks 65 or older? Add another $6,000 per person.
Why it matters:
Many retirees and fixed-income homeowners will now get an even bigger deduction—without needing to itemize. That’s real tax savings, and it pairs beautifully with reverse mortgage strategies.
3. SALT Deduction Cap Goes Up—Way Up! (Temporarily)
If you live in a high-tax state like California, this is a game-changer.
From 2025–2029, the cap on state and local tax (SALT) deductions jumps from $10,000 to $40,000 for married couples.
Why it matters:
Many of your clients who previously couldn’t deduct their full property and income taxes can now do so—up to $40K! This makes homeownership more affordable for upper-middle-income households.
4. 1031 Exchanges Are Permanently Protected
This is huge for real estate investors.
The ability to defer capital gains taxes by swapping properties through a 1031 Exchange has been permanently written into law. No expiration, no sunset clause.
Why it matters:
Investors can keep growing their portfolios without triggering taxes. If you’re working with clients selling a rental or downsizing, this can open up new opportunities—especially when paired with a reverse mortgage on the replacement property.
5. Expansion of Low-Income Housing Tax Credits
This one is more behind-the-scenes, but worth knowing.
The law expands tax credits available for developers who build affordable housing. While the impact won’t be immediate, it aims to increase housing supply and keep rents more stable in certain areas.
Why it matters:
More inventory, more potential buyers, more long-term affordability. It’s a long play—but a good one for market health.
So… What Does This All Mean for You?
Whether you’re a realtor, buyer, or homeowner thinking about your next move, here’s how to think about these updates:
| If You’re a… | Here’s What to Watch For |
|---|---|
| Realtor | Market these tax benefits! Create co-branded flyers or content that highlights savings for first-time buyers, seniors, and investors. |
| Retiree or Downsizer | The increased deduction + no monthly mortgage payment via a reverse mortgage = major cash flow boost. |
| Investor | 1031 exchanges + new deductions mean it’s a great time to reposition assets while deferring taxes. |
| Homebuyer | Bigger deductions + deductible mortgage interest make ownership more affordable. Ask your lender how these changes could affect your qualification. |
Use These Wins to Your Advantage
The One Big Beautiful Bill Act is a toolkit for savvy buyers and sellers, it unlocks real savings and planning opportunities.
Whether you’re looking to attract more buyers to your listings, help seniors age in place, or position investment properties, these changes are your new talking points.
If you want help crafting messaging around these wins—or exploring how they pair with reverse mortgages—I’d love to help.
Let’s make the most of 2025.
Craig
Mortgage Broker & Reverse Mortgage Specialist
