California homeowners — especially those in high-tax cities like Los Angeles, San Jose, San Francisco, and Santa Cruz — are about to see some long-awaited relief for their federal tax deductions. Residents in the Conejo Valley area — including Westlake Village, Thousand Oaks, and surrounding communities — may also benefit significantly.
Thanks to a new federal tax law recently signed into effect — nicknamed the “One Big Beautiful Bill” — the state and local tax (SALT) deduction cap is set to increase significantly. Starting with the 2025 tax year, eligible taxpayers with annual incomes under $500,000 will be able to deduct up to $40,000 in SALT — a huge jump from the current $10,000 cap that’s been in place since 2018.
This temporary increase applies through 2029 and includes a gradual 1% bump in both the deduction cap and income threshold each year. That means by 2029, the cap will reach $41,624 for households earning up to $520,302.
Why This Matters for Homeowners
For California residents — particularly in Los Angeles County and the Conejo Valley, where property values (and taxes) are high — this is a game-changer. Under the previous $10,000 cap, more than 20% of homeowners across the state weren’t able to deduct their full property tax burden. With the new cap, that number drops dramatically — to just 1.8%, according to Realtor.com.
In cities like San Jose, nearly 48% of homeowners pay over $10,000 in property taxes. San Francisco and Santa Cruz aren’t far behind. And while Los Angeles and Ventura County might not top that list, many homeowners in areas like Calabasas, Westlake Village, and Thousand Oaks certainly exceed that threshold. The expanded deduction could allow many of these homeowners to fully deduct their property taxes from their federal return — a rare opportunity that hasn't existed since 2017.
What About Homebuyers?
This move also gives prospective homebuyers a reason to reconsider purchasing in high-tax areas like LA or the Conejo Valley. It levels the playing field for individuals competing against investors, who already deduct taxes as business expenses. First-time buyers, in particular, may now feel more confident stepping into the market knowing they can claim higher deductions for their tax payments.
Renters & Non-Homeowners Also Benefit
Even if you don’t currently own a home, the expanded SALT deduction can benefit those who itemize other deductible state and local taxes — including sales or income taxes. With California’s high sales tax rates, this could mean additional savings during a time when inflation is already squeezing consumer budgets.
What This Means for You
If you're a homeowner in Los Angeles or the Conejo Valley — or thinking about becoming one — this new SALT deduction could put real money back in your pocket. It’s a significant win for middle- and upper-middle-class families who’ve been waiting for a tax break that reflects the true cost of living here.
📲 Let’s talk about what this means for your property goals. Whether you're buying, selling, or investing, I can help you navigate this evolving tax landscape with confidence.
👉 Contact me directly to discuss how the new SALT cap may affect your real estate decisions — and how to make the most of it.
— Tina Marie Lucarelli Global Real Estate Advisor The ONE Luxury Properties, Inc. - (310) 738-8089
