The One Big Beautiful Bill Act will have a big impact on the bottom line of some homeowners who pay property taxes in several highly taxed states, according to Redfin, the real estate brokerage company.
By contrast, homeowners who live in states where property taxes are low stand to see the least benefit.
The legislation enacted in July boosts the state and local tax — or SALT — deduction limit from $10,000 to $40,000 starting in 2026 and continuing through 2029.
That means homeowners who itemize their tax deductions, as opposed to claiming the flat-amount standard deduction, can now deduct up to $40,000 in state and local income taxes, property taxes and sales taxes on their federal tax return.
Here are the states where homeowners are most likely to save money due to the SALT limit increase — and where relief will be modest.
States with the highest estimated savings
Here are the states with the highest estimated savings from the new SALT cap:
- New York: The typical homeowner impacted by the increased SALT cap will save $7,092 per year
- California: $3,995
- New Jersey: $3,897
- Massachusetts: $3,835
- Connecticut: $3,133
Redfin notes that its estimates are based on calculating how much the new SALT rules would impact a typical homeowner, then applying a 24% marginal tax rate to the portion that is above the previous $10,000 cap. In other words, Redfin’s calculation assumes a homeowner’s federal income tax rate is 24%.
States with the lowest estimated savings
Here are the states with the lowest estimated savings from the new SALT cap:
- South Dakota: The typical homeowner impacted by the increased SALT cap will save $1,033 per year
- Alaska: $1,052
- Nevada: $1,090
- Tennessee: $1,097
- New Hampshire: $1,101
Redfin notes that all of these states have no state income tax, which means homeowners are less likely to exceed the old $10,000 SALT deduction cap. Therefore, homeowners are less likely to benefit from the increased cap.
States where many people stand to benefit
Here are the states with the highest share of homeowners that are likely to benefit from the higher SALT cap, meaning they could deduct more than the previous limit of $10,000 in combined property and state and local income taxes:
- Massachusetts: 85.5% of homeowner households are expected to benefit if they itemize their tax deductions. (The state has a median home value of $525,800 and a median property tax rate of 1.11%.)
- New Jersey: 84.2% ($427,600 and 2.23%)
- Oregon: 79.8% ($454,200 and 0.83%)
- New York: 75.8% ($403,000 and 1.6%)
- California: 74.3% ($695,400 and 0.71%)
Redfin notes that not all states with high home values will see widespread benefits from the raising of the SALT cap.
For instance, Washington has the fifth-highest median home value of all the states, yet just 9.6% of homeowners will see a boost from the new cap. That is because Washington has no state income tax and has relatively low property taxes.
States where few people stand to benefit
Here are the states with the lowest share of homeowners who are likely to benefit from the higher SALT cap:
- Tennessee: 1% of homeowner households are expected to benefit if they itemize their tax deductions. (The state has a median home value of $256,800 and a median property tax rate of 0.55%.)
- Nevada: 1.2% ($406,100 and 0.49%)
- Wyoming: 2.2% ($285,100 and 0.58%)
- South Dakota: 2.8% ($236,800 and 1.09%)
- Alaska: 3.3% ($333,300 and 1.14%)
A lack of state income tax means relatively few people in these states will benefit from the lifting of the SALT cap. However, Redfin notes that its analysis does not include sales taxes, which means the share of homeowners who benefit “may be considerably higher in some states.”
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