In a sweeping move that could reshape how Americans approach real estate, President Donald Trump has officially signed H.R. 1 (playfully nicknamed the Big Beautiful Bill) into law. While the bill covers a wide range of economic and tax-related changes, some of the most impactful provisions directly affect homeowners, first-time buyers, and real estate investors.
Here in Louisville, LaGrange, Crestwood, and the surrounding Kentucky markets, understanding how this legislation affects your purchasing power, tax strategy, and long-term investment planning is essential. Whether you’re entering the market for the first time or expanding your real estate portfolio, this bill introduces permanent tax code shifts that could influence your next financial move.
Let’s break down the major takeaways and how The Monarch Group is ready to guide you through them.
1. PMI and Mortgage Insurance Premiums: Now Tax-Deductible
One of the most homeowner-friendly updates in H.R. 1 is the permanent deductibility of mortgage insurance premiums. This includes:
Private Mortgage Insurance (PMI)
FHA Mortgage Insurance Premiums (MIP)
VA Funding Fees
USDA Guarantee Fees
For many first-time buyers, these premiums are a common and necessary part of home financing, especially when putting down less than 20%. With this new provision, buyers may now deduct these premiums annually, creating real savings at tax time.
✅ Why this matters: It reduces the overall cost of financing a home for buyers who rely on low-down-payment programs.
⚠️ Income limits apply: This deduction begins to phase out for single filers making more than $175,000 and for joint filers over $250,000. This encourages high-earning households to consult with a professional for personalized advice.
📢 Important Reminder: The Monarch Group is not a licensed CPA. For full details on how this change may benefit you personally, we strongly recommend speaking with a Certified Public Accountant.
2. Mortgage Interest Deduction Cap: Locked in at $750,000
The new law also solidifies a cap on the mortgage interest deduction and a long-debated portion of the tax code. This set a permanent limit at $750,000.
For most buyers in the Louisville metro and surrounding counties, this likely won’t be a concern, as average home prices are well within this threshold. However, luxury homebuyers or those purchasing second homes or vacation properties should be mindful of this limit, especially when planning financing for larger purchases.
🔍 Strategic takeaway: Buyers interested in high-end homes should work closely with both a mortgage lender and a CPA to understand how this cap may impact their financing and tax deductions long term.
3. No New Federal Assistance for Down Payments
For those hoping this bill would introduce new first-time buyer grants or down payment assistance, it’s important to know: H.R. 1 does not include new federal aid programs for homebuyers.
But that doesn’t mean assistance isn’t available.
💡 Pro Tip from The Monarch Group: Buyers in Kentucky can still explore these alternative resources:
State Housing Finance Agencies (HFAs)
City and county grant programs
Employer-sponsored homebuyer assistance
We’re always happy to connect you to current opportunities and walk you through what’s available locally in your price range and zip code. In fact, our team regularly helps buyers utilize local grants and employer perks to close the gap and make buying more affordable, especially for newlyweds, growing families, and young professionals.
4. SALT Deduction Cap Increased for 2025–2029
The State and Local Tax (SALT) deduction cap is another area that’s been adjusted under H.R. 1, with potential benefits for upper-middle-income homeowners.
The cap has been increased to $40,000 per household for tax years 2025 through 2029. This allows homeowners to deduct more of their property taxes, state income taxes, and local taxes which is particularly helpful for those living in higher-tax neighborhoods or school zones.
📝 Phase-out alert: Households earning over $500,000 will begin to see this benefit decrease as income rises, but it’s still a notable improvement from the previous $10,000 limit.
📍 In markets like Norton Commons, Anchorage, or Prospect, where property values and local taxes can be higher, this updated SALT cap may increase the appeal of homeownership for buyers who were previously priced out by tax limitations.
5. Big Win for Real Estate Investors: QBI Deduction is Permanent
For clients with rental properties or real estate portfolios, H.R. 1 offers one of its most impactful long-term changes: the 20% deduction for Qualified Business Income (QBI) is now permanent.
This means eligible investors can continue to deduct up to 20% of their net rental income on their taxes which is a major tax-saving incentive that was previously set to expire.
📈 Why this matters:
Boosts cash flow for landlords and real estate entrepreneurs
Encourages continued investment in rental housing
Provides tax stability for long-term planning
Whether you're managing single-family rentals in Jefferson County or looking to scale your portfolio with duplexes or multifamily properties, this update is a game-changer.
🔑 The Monarch Group can help connect you with local investment opportunities and provide data-driven insights to help you maximize returns in the current market.
6. Final Thoughts & Compliance Reminder
With the Big Beautiful Bill now signed into law, the housing landscape is shifting. Not in a short-term sprint, but in long-term strategy.
For first-time buyers, this bill provides added affordability through insurance deductions and state-level grant reliance. For high-income households, increased SALT deductions make homeownership in top-tier neighborhoods more appealing. And for investors, the extension of QBI incentives lays the groundwork for continued passive income and tax-efficient growth.
At The Monarch Group, we’re committed to helping every client navigate this changing terrain with confidence, clarity, and care. Whether you’re exploring homes in Crestwood, investing in Oldham County, or buying your forever home near downtown Louisville, our team is here to walk alongside you, informed and ready.
📢 Again, while we stay current on legislative updates and market trends, we are not tax advisors. Always consult your Certified Public Accountant (CPA) to understand exactly how these new provisions apply to your household.
🏡 Ready to explore your next move?
Let’s talk strategy: whether it’s buying, selling, or investing, The Monarch Group is your guide to navigating Kentucky real estate in today’s evolving tax landscape.
📲 Contact us today to start your real estate journey with a team who knows the market and the policy, inside and out.
