2025 Tax Reform: Big Wins for Austin Area Buyers & Sellers
Published | Posted by Brandon Holley
What the 2025 Tax Reform Bill Means for Home Buyers and Sellers in Central Texas
As a buyer or seller navigating the Central Texas real estate market, you might be wondering how the newly proposed 2025 Tax Reform Bill could impact your financial future. The good news? Early indications suggest it could be a significant win for both sides of the transaction—particularly here in high-growth areas like Austin, Kyle, Buda, and Liberty Hill.
Here at Holley Homes Realty, we believe that an informed client is an empowered one. Let's break down how this legislation could benefit you if you're considering buying or selling a home in Central Texas.
1. Enhanced Mortgage Interest Deduction (MID)
The bill preserves and makes permanent the current Mortgage Interest Deduction. This is a direct financial benefit for buyers—especially first-time homebuyers—who rely on this deduction to reduce their taxable income.
Why it matters for you:
Buyers: Your interest payments on a new mortgage in areas like Buda or Liberty Hill will continue to be deductible.
Sellers: Stable MID policies support healthy buyer demand, which helps maintain strong home values.
2. Expanded State and Local Tax (SALT) Deduction
The SALT deduction cap is tripled to $30,000 for households earning under $400,000. While Texas doesn’t have a state income tax, this change benefits property owners by making property taxes more deductible at the federal level.
Why it matters for you:
Buyers: If you purchase a home in high-value communities like 6 Creeks or Plum Creek, you can deduct more of your property taxes.
Sellers: Higher deductibility makes homes more appealing to buyers concerned about long-term affordability.
3. Permanently Lower Individual Tax Rates
The bill locks in lower income tax brackets and indexes them for inflation—improving affordability across the board.
Why it matters for you:
Buyers: You may qualify for a larger loan or lower monthly payment based on your after-tax income.
Sellers: More qualified buyers in the market can help drive quicker, stronger offers.
4. Boosted Child Tax Credit
The child tax credit increases to $2,500 through 2028, with inflation adjustments afterward. That extra money could help families save for down payments or offset moving costs.
Why it matters for you:
Buyers: Especially helpful for growing families purchasing in school-friendly districts like Hays CISD.
Sellers: More financially confident family buyers could improve your pool of interested parties.
5. Protection for 1031 Exchanges
Section 1031 like-kind exchanges remain intact, which is excellent news for real estate investors and those looking to trade up or diversify properties.
Why it matters for you:
Buyers & Sellers: Investors and move-up buyers in Austin or Georgetown can still defer capital gains when reinvesting in real estate.
Final Thoughts: Your Move Still Makes Sense in 2025
This draft bill supports affordability, preserves essential homeowner tax advantages, and encourages continued investment in real estate—all of which are especially important in fast-growing markets like Central Texas. While the legislation will likely evolve, its current form sends a strong message: real estate is a pillar of long-term wealth-building, and it’s being protected.
If you're considering a move or investment in Central Texas, now is a great time to start the conversation. At Holley Homes Realty, Brandon Holley and our experienced team are ready to help you navigate your options with clarity and confidence.
Contact us today to learn how these changes could benefit your next move.
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