The Big Beautiful Bill: How New Law Impacts San Gabriel Valley Real Estate
What is the 2025 Big Beautiful Bill?
H.R. 1, officially the One Big Beautiful Bill Act, is a 1,000‑page reconciliation package combining tax cuts, spending shifts and housing measures. Passed by the House on May 22 and signed on July 4, 2025, it is now federal law.
The real estate in the SGV is about to take a major shift. Saving buyers, sellers, & investors alike, tens of thousands of dollars in tax savings.
Key real‑estate provisions
| Area | Big change | Why it matters in SGV |
|---|---|---|
| SALT deduction (State and local Tax) | Cap rises from $10k to $40k (through 2029) for filers earning ≤ $500k | LA‑county property‑tax bills often top $10k; You get to deduct more off your taxes |
| Mortgage interest deduction | Permanently extended at 2017 levels | Keeps larger mid‑tier loans (≤ $750k) deductible for both new buyers & current homeowners who purchased after 2017 |
| Low‑Income Housing Tax Credit (LIHTC) | 12 % allocation boost + bond‑financing threshold cut to 25 % | Makes more affordable‑housing projects pencil out in cities like El Monte |
| Opportunity Zones | 10‑year renewal | OZ tracts in Azusa, Pomona & South El Monte regain investor buzz |
| Section 8 vouchers | Funding and landlord‑incentive expansion | Could shrink wait‑lists and lift Class C rents |
Tax changes SGV homeowners need to know
SALT cap relief
With the new $40k cap, a homeowner in Arcadia paying $16,000 a year in property tax regains $6,000 of deductible SALT that was not previously deductible. (SALT stands for State And Local Tax). Pair that with a 7.25 % California income‑tax rate, and mid‑income households could save $1,000–$2,400 a year in federal tax—money that can be used for vacations or children education.
Mortgage interest deduction made permanent
By locking in the post‑2017 limit ($750k loan balance) rather than allowing it to expire, the bill increases demand for homes priced $750k or less, a common price range for starter homes such as Condos & Townhouses. Although previous deductions were as high as $1M, this lock also means there will not be any shrinkage to the deduction limit. Allowing buyers to better plan purchases and refinances.
Bottom line: Expect slightly stronger buying power at the middle‑lower tiers and even more competition for listings in Alhambra, El Monte, & San Gabriel. Once buyers fully understand the bill, changes in demand will be fast!
What the bill means for first‑time buyers in The SGV
Higher take‑home pay from an expanded Child Tax Credit and larger standard deduction can nudge renters into ownership sooner. Also provides clear benefits for workers in hospitality, with less taxes to tips & overtime pay
More FHA demand: extra disposable income plus stable MI deduction keeps monthly payment ratios in line.
Less Monthly Payment : SALT adjustments & deductible PMI/Mortgage interest will significantly reduce taxes paid by 1st time homebuyers in the buying range of $750k or less
Sellers & property values
Market Slowdown in 2030. SALT relief ends in 2030; buyers who are looking to take advantage of the tax savings will most likely buy sooner than later.
Higher Buyer Demand. Starter homes will see increased demand as tax benefits roll out
Luxury remains the same —the $40k cap shrinks above $500k Gross Income, so ultra‑high earners have less to gain when purchasing luxury properties, thus a stable luxury market is predicted
Affordable housing & SGV development plays
LIHTC (Low Income Housing Tax Credits) expansion: 9 % credit allotments bump 12 % permanently; 4 % projects now need only 25 % tax‑exempt bond financing (vs 50 %). That makes small‑lot infill deals in El Monte or Baldwin Park far more bankable.
Renewed Opportunity Zones: Investors eyeing value‑add multifamily in OZ census tracts get another 10‑year deferral window.
Tip for investors: Properties that are now eligible for LIHTC but weren’t before could be receiving a boost in value. May be taken into account for purchasing more LIHTC eligible properties, or by selling your own to invest elsewhere.
Action steps for SGV homeowners, buyers & investors
Update 2025 tax projections with a CPA to quantify SALT savings.
Re‑prequalify buyers who qualified for too low of a mortgage have the chance to qualify for a higher purchase price with new take home pays, post bill
Sellers: market the revived SALT write‑off in listing to catch savy buyers.
Developers: run new LIHTC pro‑formas at 25 % bond leverage; identify OZ tracts early.
Landlords: apply for the new Section 8 landlord incentives and adjust pro‑formas for higher voucher rents.
Section 8 reforms & the SGV rental markets
Landlord‑incentive funds and expanded voucher issuance could increase rent ceilings and reduce delinquency risk, particularly in neighborhoods like La Puente or West Covina.
However, with many SGV landlords & investors likely to take action with the tax savings available, it’s likely that many more rentals will be listed soon. Experts say to expect around 1-2 years before this hits it’s peak. A good sign after the shortage of rentals that occupied post Eaton Fire.
FAQs
How will the Big Beautiful Bill affect my property taxes in the San Gabriel Valley?
Your tax bill stays the same, but you can now deduct up to $40,000 in combined property and state income taxes on your federal return, vs the old $10,000 limit, lowering your after‑tax cost of homeownership
Does the Big Beautiful Bill change mortgage‑interest deductions for California homeowners
Yes & No—by making the 2017 $750k loan‑balance cap permanent, the deduction no longer sunsets, protecting owners of mid‑priced SGV homes from losing thousands in annual write‑offs. But it also doesn’t increase or lower this cap, meaning more stability and better planning for future homeowners
What does the Big Beautiful Bill mean for Section 8 tenants in Arcadia or El Monte?
HUD expects more vouchers and faster processing, so renters may see shorter wait‑lists and slightly higher voucher amounts, improving mobility into better neighborhoods. This could also nudge investors and landlords to offer up more Section 8 housing.
Will the bill lower housing costs in the SGV?
Unlikely. Tax relief tends to boost demand, which supports prices, while LIHTC and voucher expansions target affordability but won’t add sufficient supply to cut market‑rate prices in the near term. I doubt the tax benefits are enough for big developers to churn out more projects, most likely demand may rise while supply stays the same
📍 Final Thoughts from a Local Realtor
The Big Beautiful Bill is a mixed bag—delivering real tax wins for SGV homeowners and fresh incentives for builders, while layering long‑term fiscal uncertainty onto safety‑net programs. Staying nimble, informed and well‑advised will separate the winners from the merely curious.
This does not touch on the topic of Medicaid at all however! A major downfall that’s caused backlash from lots of residents not just in the SGV, but in the country as a whole.
Thinking about buying, selling or developing in the San Gabriel Valley? Let’s talk strategy while the new rules are still fresh.
If you’re considering making a move or have questions about specific neighborhoods, I’d love to help.
