House Blocks Bill to Boost State and Local Tax Deduction
On a procedural vote of 195-227, the House on Feb. 14 rejected legislation that would temporarily double the state and local tax (SALT) deduction limit for married couples. NAHB strongly supported the SALT Marriage Penalty Elimination Act.
The SALT Marriage Penalty Elimination Act would have raised for tax year 2023 the cap on the SALT deduction for married taxpayers filing joint returns and earning less than $500,000 a year from the current $10,000 limit to $20,000 for the current tax year. This would have allowed eligible taxpayers who are filing their 2023 tax returns now to immediately claim the expanded benefit.
The SALT deduction allows itemizing taxpayers to deduct taxes paid to state and local governments — including property taxes — from their federal tax return. Beginning in 2018, itemizing taxpayers were limited to a maximum $10,000 deduction for all state and local tax deductions. The $10,000 cap was not indexed for inflation, and is identical for singles and couples, which imposes a sizeable marriage penalty.
Considering that home size, price and property taxes tend to increase with family size, the current SALT deduction limits can be viewed as penalizing families who are already struggling with high housing costs and rising inflation.
Under the principle that taxes paid to state and local governments should not be double-taxed as income by the federal government, NAHB supports eliminating the SALT deduction cap entirely. With the failure of this procedural vote, it’s unlikely any further legislation to modify the SALT deduction cap will be considered this year.
Under current law, the $10,000 deduction limit expires after 2025, alongside many other tax provisions that were enacted as part of the 2017 tax reform bill. This deadline will force Congress to re-evaluate those 2017 tax changes next year, including the limit on SALT deductions.
Latest from NAHBNow
May 14, 2025
Department of Energy Remodels Annual Student Building Design ShowcaseThe annual BuildingsNEXT Team Showcase, formerly known as the Solar Decathlon, was held last month in Golden, Colo. This collegiate design competition prepares the next generation of building professionals to design high-performance buildings powered by renewables.
May 14, 2025
NAHB Submits Extensive Deregulatory Recommendations to OMBOn May 12, NAHB submitted a comprehensive framework of deregulatory recommendations to the Office of Management and Budget (OMB) that covers several federal agencies that encompass a host of regulations affecting the residential construction industry.
Latest Economic News
May 14, 2025
Permit Activity Declines in March 2025Permits continue a downhill trend for the third month in a row. Over the first three months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 232,221. On a year-over-year (YoY) basis, this is a decline of 3.8% over the March 2024 level of 241311. For multifamily, the total number of permits issued nationwide reached 113,344. This is 3.7% below the March 2024 level of 117,695.
May 13, 2025
Inflation Eased Again in AprilInflation slowed to a 4-year low in April while shelter inflation remained elevated. Despite the easing, inflation may pick up in the coming months as possible inflationary pressure from enacted tariffs and other policy uncertainties continues to threaten economic growth and complicate the Fed’s path to its 2% target.
May 13, 2025
Residential Mortgages Experience Weaker Demand in First QuarterOverall demand for residential mortgages was weaker while lending standards for most types of residential mortgages were essentially unchanged according to the Federal Reserve Board’s April 2025 Senior Loan Officer Opinion Survey (SLOOS).