Attention Long Island Homeowners: Significant Property Tax Relief Under the One Big Beautiful Bill
Long Island residents in Nassau and Suffolk counties are well acquainted with the substantial property taxes in the region. However, many may not be aware of the considerable relief provided by the One Big Beautiful Bill as you prepare your 2025 tax returns. The previous $10,000 deduction cap has been eliminated, allowing for significantly higher deductions. The new limit is now $40,000 for joint filers and $20,000 for single filers.
Given that average property taxes on Long Island often exceed $10,000, this change offers substantial benefits. Below, we outline the key details to help you maximize your savings.
Enhanced SALT Deductions for 2025
The State and Local Tax (SALT) deduction allows you to subtract state and local taxes from your federal taxable income. This primarily includes property taxes, which average over $12,000 in the area. Previously capped at $10,000, the deduction has now increased to $40,000 for married couples filing jointly and $20,000 for single or married filing separately taxpayers. This enables you to deduct your full eligible expenses.
You may also combine property taxes with state income taxes, provided you monitor your income levels. Phase-outs begin if your Modified Adjusted Gross Income (MAGI) exceeds $500,000, with the deduction fully phasing out at $600,000. To take full advantage, itemizing deductions is recommended, as the standard deduction may not be as beneficial for local homeowners.
Additionally, individuals aged 65 and older are eligible for an extra $6,000 deduction through 2028, providing further support for retirees in our communities. For more information, refer to the IRS guidelines here.
This adjustment is particularly advantageous for Long Island residents, as it alleviates a significant financial burden by allowing deductions beyond the former limit.
Updates for 2026 and Beyond
The One Big Beautiful Bill, enacted in 2025, secures these enhancements through 2029, with annual increases of 1% starting in 2026. For example, the cap for joint filers is projected to rise to $40,400 in 2026.
Certain adjustments apply: Pass-through business owners, common in the region, may qualify for higher limits. Income thresholds will also increase by 1% annually after 2026. If you own a small business, consult a tax professional to plan accordingly.
The bill includes additional provisions that extend stability until 2030, after which potential changes may occur. For the complete text, visit Congress.gov.
As your comprehensive real estate resource here on Long Island, Jones Hollow Realty Group is dedicated to supporting you with all your property needs. For personalized assistance, contact our team today at (631) 650-3977 or visit JonesHollowRealty.com.