Owning a home is one of the most powerful investments you can make, and when tax laws change, that investment can look very different year to year. With the recent passage of a new federal tax bill, New York homeowners (and those thinking about buying) stand to benefit in several important ways. Here’s a closer look at what’s changed, and how it could affect your bottom line.

1. Mortgage Interest Deduction Still in Place

One of the most common homeowner tax benefits remains intact: the ability to deduct mortgage interest. The rule is simple: as long as your mortgage balance is $750,000 or less, you can continue to deduct the interest you pay each year.

For higher-value homes with mortgages above that limit, the deduction begins to phase out. While most homeowners won’t hit that threshold, it’s an important number to keep in mind if you’re purchasing in today’s higher-priced market.

2. PMI Becomes Deductible Again in 2026

For buyers who purchased with less than a 20% down payment, private mortgage insurance (PMI) has long been part of the monthly bill. Starting in 2026, that cost will once again be tax deductible.

This change will bring real relief to many first-time and younger buyers who haven’t yet built up enough equity to eliminate PMI.

3. Home Equity Loan Interest Rules

Home equity loans (HELOCs) remain a useful way for homeowners to access cash. The new law clarifies that interest on these loans is deductible only if the funds are used to improve or maintain your primary residence.

That means using your HELOC for a kitchen remodel? Deductible. Using it to fund a business or buy another property? Not deductible.

4. The Big Win for NY: SALT Deduction Increase

The change with the biggest impact for New Yorkers is the overhaul of the State and Local Tax (SALT) deduction.

• Old Law: Homeowners could deduct a maximum of $10,000 of combined state income and property taxes.
• New Law: That cap has been raised to $40,000 for single and married filing jointly (or $20,000 if married filing separately).

Example:
A NY couple paying about $19,750 in combined state income and property taxes used to be capped at $10,000. Under the new law, they can now deduct the full $19,750. Add in mortgage interest, and their total deductions jump by nearly $10,000 compared to last year — which could mean thousands of dollars more in after-tax savings.

What This Means for Homeowners

In a high-tax state like New York, these updates are a game-changer. Homeowners will benefit from higher deductions, more favorable treatment of PMI and HELOC interest, and a SALT cap that finally reflects the reality of living in states with higher property and income taxes.

For prospective buyers, this makes homeownership even more appealing, knowing that your purchase may come with greater tax benefits in the years ahead.

Final Thoughts

While every household’s situation is different, these tax law changes are expected to put more money back into the hands of New York homeowners. If you’d like a personalized breakdown of what this means for your taxes, we recommend speaking with a qualified CPA.

In the meantime, if you’re considering buying or selling a home, we’d be happy to walk you through how these changes could affect your decision.