Earlier this month, Congress passed a sweeping $4.5 trillion budget bill known informally as the “One Big Beautiful Bill Act.” While the name may sound lighthearted, the bill introduces major changes that directly impact real estate. From increased SALT deductions to permanent mortgage tax benefits and expanded development incentives, this legislation brings real value to homeowners, buyers, and investors, especially here on the North Shore.
If you own property or plan to make a move in Glencoe, Glenview, Winnetka, Northbrook, or surrounding communities, here is what you should know.
SALT Deductions Are Getting a Boost
If you live in Illinois, you are no stranger to property taxes. The 2017 tax law placed a $10,000 cap on state and local tax (SALT) deductions, which limited how much high-tax homeowners could write off. That cap is increasing to $40,000 starting in 2025. It will rise slightly each year until 2029 before returning to the $10,000 cap.
What this means for North Shore homeowners:
This expanded deduction is good news. It could help lower your taxable income whether you already own a home or are planning to buy in a high-tax suburb like ours. For sellers, this change may also improve the appeal of homes in towns where taxes have been a concern for buyers.
Mortgage Interest and PMI Deductions Are Now Permanent
Two tax benefits that many homeowners depend on have been locked in permanently. The first is the ability to deduct mortgage interest on up to $750,000 of acquisition debt. The second allows borrowers to deduct mortgage insurance premiums, including those from FHA, VA, or USDA loans, as long as they meet the income requirements.
Why this matters on the North Shore:
With higher home values in our area, these deductions make a big difference. If you purchased with less than 20 percent down, or if you are financing a higher-priced home, these savings add up over time. This is also an encouraging sign for buyers who may be on the fence due to interest rates.
A New Era for Real Estate Investment and Development
For those involved in development or commercial real estate, the bill also brings significant updates. The Opportunity Zone program is now permanent and includes stricter rules to ensure investments go where they are most needed. Investors can still defer capital gains for up to five years and receive discounted capital gains tax depending on location.
The bill also expands Low-Income Housing Tax Credits. The 9 percent credit allocation is increasing by 12.5 percent and the bond financing threshold for 4 percent credits is being lowered from 50 percent to 25 percent. These changes are expected to increase the supply of affordable housing, even in suburban markets.
What this could mean locally:
While these programs are national, areas of the North Shore may benefit from increased investment opportunities, especially near transit corridors or redevelopment sites.
Let’s Talk About Your Next Move
The bottom line is this: the “Beautiful Budget Bill” brings real financial advantages that affect both current homeowners and future buyers here on the North Shore. Whether you are planning to sell your home in Glenview or considering buying your first property in Wilmette, this bill might change your strategy.
Have questions about how this could impact your plans? Reach out anytime, I am always happy to help you navigate real estate with clarity and confidence.
