New Tax Benefits Homeowners Should Know About in 2026

As we head into the 2026 tax season, homeowners have some important new opportunities that could lower taxes and increase refunds - especially thanks to recent changes in federal law that affect deductions and itemized tax benefits.

One of the biggest changes homeowners will notice is the increase in the State and Local Tax (SALT) deduction cap. In previous years, the SALT deduction was limited to $10,000, which meant many homeowners in high-tax states couldn’t fully deduct the property taxes and state income taxes they paid. That cap has now been boosted to $40,000 for most filers, making it possible for many homeowners to deduct a significantly larger portion of their property tax burden if they itemize.

Along with the expanded SALT deduction, another major tax benefit is the permanence of the mortgage interest deduction. This deduction - which allows homeowners to deduct interest paid on home acquisition debt - was previously at risk of changing, but the new tax law has made its current limits permanent. That gives buyers and refinancers more certainty when planning their finances.

These changes are part of a broader shift in the tax code aimed at giving taxpayers - including homeowners - more favorable treatment and the potential for larger refunds or lower overall tax bills. According to current projections, typical tax refunds across the U.S. may be higher this year than in years past, with some Americans seeing average increases near $1,000 per household compared to prior seasons.

However, every homeowner’s situation is unique, and the exact benefit you’ll see depends on your income, whether you itemize your deductions, and the amount you pay in property taxes and mortgage interest. For some, the increased deduction limits may mean it’s now worth itemizing - while for others, the higher standard deduction amounts could still make that the better choice.

Finally, filing accurately and preparing early can help maximize whatever benefits you’re eligible for. Collecting the right tax documents - like property tax statements or mortgage interest statements - and discussing your situation with a tax advisor can ensure you’re making the most of the opportunities available for the 2026 tax year.

Whether you’re a long-time homeowner or just purchased your first home, being informed about these changes can help you keep more of your money and take full advantage of the tax benefits available this year.

For more information about the recent tax changes take a look at this article from Realtor.com.