Homeownership is usually a supply of pleasure for a lot of. Whether or not it’s a contemporary begin in a distinct locale or a brand new life with a cherished one, some would possibly name proudly owning a house the “American Dream.”
However the monetary prices of homeownership is usually a nightmare.
The typical annual value of proudly owning and sustaining a single-family dwelling within the U.S. is over $21,000 a 12 months, in response to a 2025 Bankrate examine.* Property taxes, upkeep charges, and different so-called “hidden dwelling prices” have some owners paying over $34,000 yearly of their state.
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To not point out, latest political actions may make issues difficult for American owners. The extremely debated state and native tax (SALT) deduction may exacerbate dwelling prices and result in costlier federal tax payments in 2026. Right here’s what to know.
*Bankrate’s ‘hidden dwelling value of homeownership examine’ included 49 out of the 50 U.S. states. New York was excluded on account of information limitations.
Property tax amongst prime dwelling prices
As dwelling costs have skyrocketed 197% within the final twenty-five years, hidden dwelling prices are additionally on the rise. Right here’s the cost for a number of gadgets you won’t anticipate when shopping for a house, in response to Bankrate’s survey:
- Dwelling upkeep. The typical value of sustaining a house is over $8,800 per 12 months.
- Utilities and vitality. The typical annual invoice for these providers is almost $4,500.
- Property taxes. Owners can anticipate to pay a median $4,316, if not greater, yearly.
- Dwelling insurance coverage. Insuring a single-family dwelling can value nearly $2,300 per 12 months.
- Web and cable. Owners pay a median of $1,515 yearly for cable and web providers.
*These numbers come from one survey, prices and averages can range broadly by state and protection quantities within the case of dwelling insurance coverage.
One other Bankrate survey revealed that almost half of householders with shopping for regrets cited upkeep and different hidden prices as being “costlier than anticipated.” Unanticipated prices, which may embrace property taxes, had been the most typical supply of purchaser remorse.
SALT deduction cap may make property taxes costlier
The SALT deduction has allowed taxpayers who itemize to say state and native taxes on their federal return for over 100 years.
However the $10,000 “cap” on SALT — limiting how a lot of a deduction for state and native taxes taxpayers could declare — has solely been in place for about 7-8 years as of 2025.
Created to offset the Tax Cuts and Jobs Act (TCJA) tax cuts, the “SALT cap” is at present underneath debate within the “One Huge Stunning Invoice Act.”
There are two ongoing proposals to completely lengthen the SALT deduction restrict:
- The U.S. Home of Representatives handed its model of Trump’s tax plan, which, if accredited, would elevate the SALT cap from $10,000 to $40,000 beginning in 2025, with a phaseout for incomes above $500,000 (married submitting collectively). (Incomes above $500,000 would nonetheless be topic to the $10,000 cap.)
- The U.S. Senate tax proposal at present requires sustaining the $10,000 SALT cap, as a placeholder pending negotiation.
So what does this must do with property taxes?
Effectively, a giant a part of your state and native tax (SALT) deduction could come out of your property tax invoice. If the SALT cap hinders how a lot you may declare, that could possibly be problematic, significantly in states with excessive property tax payments.
Worst states for SALT Cap
Whereas taxpayers in all states could possibly be affected by a sustained SALT cap, seven could possibly be hit the toughest when wanting on the state and native tax collections per capita from the Tax Basis:
- District of Columbia (D.C.), the place taxpayers pay a median of $14,974 in annual state and native taxes.
- New York with a median of $12,685 per capita.
- California, at $10,319 per capita.
- Connecticut with $9,718 per capita.
- Hawaii, with $9,503 per capita.
- New Jersey at $9,366 per capita.
- Massachusetts, with $9,341 per capita.
Whereas the above figures could have some state and native taxes that aren’t SALT deductions, per capita figures embrace property taxes, earnings taxes, and gross sales taxes — all of which can be included in SALT.
And have in mind, the per capita numbers are simply averages. The $10,000 SALT cap may considerably affect taxpayers who pay extra in state and native taxes, particularly as property tax charges soar.
Backside line: Property tax charges are on the rise
Property taxes on single-family houses have risen practically 7% lately, per ATTOM, an actual property information firm.
- That’s nearly double what the speed was the 12 months earlier than, and the most important within the final 5 years.
- If property taxes proceed to rise, however the SALT cap stays at $10,000, taxpayers could possibly be sandwiched between having to pay greater property tax payments and being unable to say a full deduction on these elevated prices.
Nonetheless, the Home and Senate have but to agree on the brand new SALT cap provision particulars.
Within the meantime, it’s possible you’ll need to seek the advice of with a tax skilled to organize for a number of potential legislative outcomes. Many households select mid-year to get some tax planning performed, and staying forward of the curve may help you finest reply to adjustments made on Capitol Hill.
Keep tuned for extra updates.
