Washington state, known for its lack of income tax, faces rising property tax burdens due to increasing home values. The federal SALT deduction cap has been raised from $10,000 to $40,000, providing tax relief primarily to residents in high-cost areas like Seattle. Previously, 9.4% of Washington homeowners exceeded the $10,000 cap, but this number is expected to drop to 0.8%. The situation is even more pronounced in Seattle, where 16.8% exceeded the previous limit. The reform is set to benefit many middle-class homeowners and those with significant property taxes and mortgages.
According to Realtor.com economists, 9.4% of Washington homeowners exceeded the previous $10,000 SALT deduction cap. With the new $40,000 ceiling, only 0.8% are projected to remain above the limit.
Residents of high-tax states suffered the most with the previous cap on state and local taxes. Because their taxes far exceeded the cap, they were not able to deduct the full amount.
To put the benefits in greater focus, those living in Seattle will see an even greater impact than the whole state of Washington. 16.8% of Seattle homeowners exceeded the previous $10,000 SALT deduction cap.
The early beneficiaries of the new law will be homeowners who have a mortgage and pay significant property taxes. Those who purchased during the recent housing boom are likely to see the most benefit.
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