The recent increase of the SALT deduction cap to $40,000 by Congress provides tax relief for Hawaii homeowners, many of whom previously faced financial strain under the $10,000 limit. Prior to the increase, 7.7% of homeowners in Hawaii exceeded the cap, a figure that is expected to drop to just 0.6%. High-tax areas like Honolulu and Kahului are expected to benefit significantly, alleviating burdens on residents, including those impacted by recent disasters. The new cap will allow more homeowners to fully deduct their state and local tax liabilities.
The $40,000 SALT deduction ceiling approved by Congress provides much-needed tax relief for Hawaii homeowners facing high property taxes, significantly reducing the number exceeding the limit.
Colin Allen states that residents in high-tax states bore the brunt of the previous $10,000 cap, which hindered their ability to fully deduct taxes compared to those in lower-tax regions.
The expansion of the SALT deduction will particularly benefit homeowners with high property taxes, including those in areas severely impacted by the 2023 fires.
According to Realtor.com, a significant decrease from 7.7% to 0.6% of Hawaii homeowners will exceed their state and local tax deductions under the new SALT cap.
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