Tax-smart homeownership just got a real update, and I wanted to write to my CPA partners about it directly — because the math you ran for a client two years ago no longer holds. On July 4, 2025, the One Big Beautiful Bill Act quadrupled the state-and-local-tax (SALT) deduction cap from $10,000 to $40,000, and for 2026 it’s indexed to roughly $40,400. For your San Diego clients carrying a mortgage and a five-figure property-tax bill, that single change can flip them from the standard deduction back into itemizing.
The quick answer for partners
- SALT cap is now $40,000 ($40,400 for 2026 with indexing), up from $10,000.
- The $750,000 mortgage-interest limit is now permanent — no more sunset guessing.
- PMI is deductible again as mortgage interest starting in tax year 2026.
- Net effect: itemizing is back on the table for a lot of mid-market San Diego homeowners — and that changes buy, refi, and pay-down conversations.
Who this is for
This one’s for the CPAs and tax pros I work with across San Diego — the people your clients trust before they trust anyone. You’re not looking for a sales pitch; you’re looking for accurate mechanics so you can advise well and know exactly when a lender belongs in the conversation. I’m Ron Berg, a mortgage broker here in San Diego, and my job in our partnership is simple: make you look good to your clients and never step on your lane.
You already know the feeling of a client who overpaid on taxes because nobody connected the financing decision to the tax picture in time. That’s the gap tax-smart homeownership closes — and it usually only closes when the CPA and the lender are talking before the client signs anything.
Why the $40,000 SALT cap matters so much in San Diego
San Diego County’s median home price sat at about $1.02 million in July 2026. A home in the $700K–$1.2M range throws off a property-tax bill in the $7,000–$15,000 range before you add state income tax. Under the old $10,000 cap, most of that was stranded. At $40,000, a dual-income household in this county can often absorb their full property tax and a chunk of state income tax under the cap — and once you stack mortgage interest on top, itemizing frequently beats the standard deduction again.
A rough itemizing picture (illustrative only)
| Deduction line (married filing jointly) | Old rules | 2026 rules |
|---|---|---|
| SALT (property + state income tax) | Capped at $10,000 | Capped at ~$40,400 |
| Mortgage interest ($750K balance @ 6.66%) | ~$49,000 yr 1 | ~$49,000 yr 1 |
| PMI | Not deductible | Deductible as interest |
| Likely outcome | Standard deduction wins | Itemizing often wins |
The financing decision and the tax decision are the same decision. They just get made in two different offices.
Three moments to loop in a lender
- Before a purchase. Loan structure (down payment size, buying points, loan type) changes the deductible-interest and PMI picture you’ll report. A five-minute call before pre-approval beats a correction at filing.
- Before a refinance or cash-out. With the 30-year fixed averaging 6.66% (Freddie Mac, week of July 30, 2026), most of your clients aren’t refinancing the whole loan — they’re weighing equity strategies that keep their low first mortgage intact. Those choices have tax fingerprints.
- During estate and legacy planning. Amara and I are moving our own properties into a trust right now, so how title and financing interact with a client’s long-term plan is top of mind for me. When your client is thinking about that, I’m glad to be the lender in the room.
Frequently asked (partner edition)
Does California follow the federal $750,000 mortgage-interest limit?
California conforms to the $750,000 federal limit, though the state has historically kept its own higher-balance provisions given local prices. Confirm the current-year specifics on your side — that’s your lane, not mine.
Is the PMI deduction really back?
Yes — beginning in tax year 2026, PMI is treated as deductible mortgage interest again. That matters for lower-down-payment buyers who used to write it off before it lapsed.
Will you ever give my client tax advice?
Never. I explain financing mechanics and send them right back to you for the tax call. That’s the whole point of the partnership.
Free live session for CPAs: kill the client-comms busywork
On Thursday, October 1 at 7:00 AM PT / 10:00 AM ET, I’m hosting a free live working session — Automate Your Back Office with Claude + Cowork — for CPAs, financial planners, and realtors. We build it on screen: client communication that runs itself, staying top-of-mind year-round instead of only at filing season, and drafting emails and content in your own voice in seconds. Bring the task you can’t stand doing and we’ll automate it live. No pitch, no pressure — and everyone who registers gets the AI Automation Starter Checklist plus the replay.
Ron Berg is a San Diego mortgage broker with The Berg Group, powered by C2 Financial. He builds referral partnerships with CPAs, financial planners, and Realtors so shared clients finance homes the smart way. Licensed in CA, NV, AZ, and MD.
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Related reading on this site: how much house your clients can actually afford in San Diego and tapping equity without torching a low first mortgage. Sources: IRS Publication 936 (Home Mortgage Interest) and the Tax Foundation on the SALT cap change.
Educational only — not tax or legal advice. I’m a mortgage professional, not a CPA or attorney; every client should confirm their own tax treatment with their tax advisor. Mortgage rates cited are national averages from Freddie Mac’s Primary Mortgage Market Survey and are not quotes or offers to lend. Ron Berg NMLS #974839 · C2 Financial Corp NMLS #135622 · CA DRE #01821025. Equal Housing Opportunity.