Could a tweak to the tax code offer a modest boost to New York City’s real estate market? President Trump’s latest tax proposal includes a revision to the State and Local Tax (SALT) deduction that may offer some incremental relief to select city homeowners.

Since 2017, the SALT deduction cap has remained fixed at $10,000, a number that has weighed heavily on high-tax states like New York and California, where property and income taxes are significant. The new proposal, passed by the House on May 22, 2025, would temporarily raise the cap to $40,000 for joint filers earning up to $500,000. The benefit phases out gradually and disappears entirely for those earning over $600,000. Final approval is still up to the Senate.

It’s also worth noting that only those who itemize their deductions—as opposed to taking the standard $30,000 deduction for married couples—would benefit. For many co-op and condo buyers in New York City, the practical effect will be minimal. But for households with incomes between $200,000 and $500,000 and higher property tax bills, this change could slightly improve post-tax affordability.

For joint filers earning in that $200,000 to $500,000 range, the increased deduction could mean around $2,400 in annual tax savings, assuming a 24% federal tax bracket. That translates to about $35,000 in added purchasing power, which could make a difference for buyers looking at homes priced between $1 million and $2 million.

For families trying to bridge New York’s affordability gap, that added cushion might help tip the scales. But for higher-income households, especially those earning above $600,000, the cap remains effectively unchanged.

As Mitchell Snow of Adler & Stachenfeld put it, “This benefits the high net worth individuals, but not ultra-high net worth.”

The 2017 SALT cap did have a chilling effect on home price growth in high-tax markets like New York. Loosening that cap, even modestly, could provide some lift for mid-market properties, particularly in the $1 million to $2 million range.

At The Roebling Group, we’re keeping a close eye on the details. If you’re wondering how this might shape your next purchase, whether you’re planning a move or investing for the long term, we’re here to help make sense of it.

Best,

Corey Cohen

Founder of The Roebling Group