Homeownership and Tax Benefits: A 10-Part Blog Series
- Georgina Patterson
- May 8
- 3 min read
By Georgina Patterson | Your Real Estate Connection
BLOG #1: What are the most important tax benefits homeowners should know about when buying or owning a home in California?
Renting vs. Buying a Home in Marin County and the Bay Area
For many people in California, the conversation about buying a home usually starts with one question: "Is it cheaper to rent or buy?"
While monthly payments matter, many buyers overlook one of the biggest financial advantages of homeownership: tax benefits.
For homeowners in high-cost areas like Marin County and the San Francisco Bay Area, these tax benefits can make a significant impact on long-term affordability.
1. The SALT (State and Local Taxes) Deduction Increase Could Benefit California Homeowners
One of the most impactful changes in recent tax law is the increase to the SALT (State and Local Taxes) deduction cap.
For years, homeowners were limited to deducting only $10,000 of these taxes on their federal tax return. Under the updated tax law, qualifying households may now be able to deduct up to $40,000 between 2025 and 2029, depending on income limits.
For California homeowners, where state income taxes and property taxes are often high, this can be a meaningful benefit.
Example: A California Homeowner
Let’s say a household:
Earns $200,000 per year
Purchases a home for $1.5 million
Pays approximately $15,000 in California state income tax
Pays $19,000 in property taxes
Before:
The homeowner may have only been able to deduct:
$10,000 total for SALT deductions
Now:
The homeowner could potentially deduct approximately:
$34,000 total for SALT deductions
That’s an additional $24,000 reduction in taxable income. Depending on the homeowner's tax bracket (if their income is less than $500,000 per year), this could create substantial tax savings. If they earn more than $500,000, the SALT deduction is only $10,000.
2. Mortgage Interest Deduction
Another major benefit of homeownership is the mortgage interest deduction.
Homeowners can deduct qualifying mortgage interest paid on their primary and secondary residences. In the early years of a mortgage, interest payments are often substantial, which may provide additional tax advantages, especially in Marin and Sonoma County, where the average home costs over $1,000,000.
This means that your monthly mortgage payments, while large, may offer you considerable savings in the long run.
3. PMI Is Also Deductible Now
For buyers who purchased with a lower down payment, Private Mortgage Insurance (PMI) also qualifies as a tax deduction for eligible homeowners.
This can be a game-changer for first-time buyers, helping them enter the market sooner rather than waiting years to save for a larger down payment.
Homeownership Is More Than Just a Monthly Payment
When comparing renting versus buying, many people focus only on:
Mortgage payment
Interest rate
Insurance
Property taxes
But homeowners may also benefit from:
Tax deductions
Long-term equity growth
Appreciation
Stability
Predictable housing costs over time
In the San Francisco Bay Area, particularly in Marin County, owning real estate has long been a proven strategy for building long-term wealth for many families.
Final Thoughts
Every buyer’s financial situation is different, and tax rules can change over time. Before purchasing a home, it’s always important to speak with a tax professional regarding your specific situation and eligibility for deductions.
However, understanding these homeowner tax benefits may help buyers see the bigger financial picture when deciding whether to rent or buy.
About the Author
Georgina Patterson is a French-American real estate professional serving Marin County in the San Francisco Bay Area. With a background in tax preparation as an Enrolled Agent, she helps clients better understand both the lifestyle and financial side of homeownership. Georgina is fluent in both French and English, allowing her to effectively serve international clients and bridge cultural gaps in the real estate market.
Georgina Patterson Realtor®, DRE #02104684
📞 415.342.6794
Let’s Talk Through Your Position
If you are considering moving to Marin County, I am happy to walk you through to discover whether buying or renting makes more sense to you.
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