How the 2025 Property Tax Law Changes Impact Lincoln, Placer County & Sacramento Area Homeowners
What Lincoln, CA Homeowners Need to Know About the “One Big Beautiful Bill”
If you’re a homeowner in Lincoln, California—whether in Sun City Lincoln Hills, Twelve Bridges, Catta Verdera, or any of our beautiful Placer County communities—you need to know about the massive tax changes that just took effect. As your local Lincoln CA Realtor living right here in Catta Verdera, I’m breaking down exactly what this means for your wallet.
President Trump signed the “One Big Beautiful Bill Act” into law on July 4, 2025, and it fundamentally changes how real estate taxes work for Lincoln homeowners and investors throughout Placer and Sacramento counties.
Lincoln CA Neighborhoods: Property Tax Breakdown
Here’s what homeowners are paying in annual property taxes across Lincoln’s most popular communities (based on ~1.2% Placer County tax rate):

Note: Bickford Ranch is a master-planned community featuring homes by Trilogy (55+), Toll Brothers, and Tri Pointe Homes with a wide range of prices and home styles for all ages.
With the new $40,000 SALT cap, ALL of these homeowners can now deduct their full property tax bill plus state income taxes up to the cap.
Lincoln, CA Real Estate Market Context (October 2025)
Before we dive into tax deductions, here’s what’s happening in our local Lincoln real estate market right now:
- Median home price: $637,000-$718,000 (depending on neighborhood)
- Days on market: 22-29 days (very competitive!)
- Inventory: Up 35% year-over-year in Placer County
- Popular communities: Sun City Lincoln Hills ($705K median), Twelve Bridges, Catta Verdera, Verdera
What this means for taxes: With Lincoln home values in the $600K-$900K range, the new tax changes can save homeowners $3,000-$7,000 annually. Keep reading to see exactly how.
The Short Answer: Yes, Real Estate Property Taxes Are Deductible (But There Are Limits)
Property taxes on your home ARE tax deductible, but only if you itemize your deductions rather than taking the standard deduction. This is where things get interesting with the new tax law.
The Big Change: SALT Deduction Cap Increased
First, what is SALT? SALT stands for State And Local Taxes. This federal deduction lets you write off the taxes you pay to California and Placer County on your federal tax return. For homeowners, this includes:
- Property taxes on your home
- California state income taxes
- (You can choose property + income taxes OR property + sales taxes, whichever is higher)
Here’s what just changed: The SALT deduction cap has been temporarily raised from $10,000 to $40,000 per household for tax years 2025 through 2029.
What this means in plain English: You can now deduct up to $40,000 of your combined state income taxes AND property taxes on your federal tax return. Previously, you were capped at just $10,000.
Who benefits most?
- Lincoln homeowners (especially in Sun City Lincoln Hills, Twelve Bridges, Catta Verdera)
- Placer County residents with high property values
- Higher-income earners between $200,000-$500,000
- Sacramento County homeowners in Granite Bay, Roseville, Folsom, Loomis
The catch: If your household income exceeds $500,000, the $40,000 deduction begins to phase out, disappearing completely at $600,000 of income.
How the SALT Property Taxes Deduction Works: Real Lincoln, CA Examples
Let’s use actual Lincoln home values to show you the impact:
Example 1: Sun City Lincoln Hills Home
Your Home:
- Purchase price: $705,000 (median in Sun City Lincoln Hills)
- Annual Placer County property tax: ~$8,460 (1.2% rate)
- California state income tax (household income $250K): $18,000
- Total SALT: $26,460
Under the OLD law (pre-2025):
- You could only deduct $10,000
- You “lost” $16,460 in deductions
- Extra federal tax paid: ~$4,935 (at 30% rate)
Under the NEW law (2025-2029):
- You can deduct the full $26,460
- Annual federal tax savings: $4,935
Example 2: Twelve Bridges Home
Your Home:
- Purchase price: $850,000
- Annual Placer County property tax: ~$10,200
- California state income tax (household income $180K): $12,000
- Total SALT: $22,200
Tax savings with new law: $3,660 per year
Example 3: Catta Verdera Luxury Home
Your Home:
- Purchase price: $1,200,000
- Annual Placer County property tax: ~$14,400
- California state income tax (household income $400K): $32,000
- Total SALT: $46,400
Note: Your SALT is over $40,000, but you can still deduct $40,000 (vs. the old $10,000 cap) Tax savings with new law: $9,000 per year
Other Real Estate Property Tax Changes You Need to Know
1. Mortgage Interest Deduction is Now Permanent
The $750,000 cap on deductible mortgage debt is now permanent. Previously, this was set to expire in 2025 and revert to the old $1 million limit.
What this means:
- If you have a mortgage of $750,000 or less, you can deduct all the interest
- For mortgages above $750,000, only interest on the first $750,000 is deductible
- This applies to your primary residence and one second home
2. Mortgage Insurance Premium Deduction is BACK (Starting 2026)
The deduction for private mortgage insurance (PMI) has been revived! Beginning in tax year 2026, if you’re paying PMI because you put down less than 20%, you can deduct those premiums as mortgage interest.
3. Energy Tax Credits Are Ending December 31, 2025
URGENT: If you’re planning solar panels or energy-efficient home improvements, you must act by December 31, 2025:
- Residential Clean Energy Credit (30% for solar panels, wind turbines, battery storage, geothermal): Projects must BEGIN CONSTRUCTION by July 5, 2026 to qualify (with completion deadlines)
- Energy Efficient Home Improvement Credit (up to $3,200 for insulation, windows, HVAC): Expires December 31, 2025
Previously, these credits were scheduled to last until 2033-2035. The One Big Beautiful Bill Act accelerated their termination.
4. Standard Deduction Increased (Slightly)
For 2025:
- Single filers: $15,750 (up from $15,000)
- Married filing jointly: $31,500 (up from $30,000)
Why this matters: You need to compare whether itemizing (to claim property tax and mortgage interest deductions) saves you more money than just taking the standard deduction.
Should You Itemize or Take the Standard Deduction?
You should itemize if your total deductions exceed:
- $15,750 (single filers)
- $31,500 (married filing jointly)
Common itemized deductions include:
- State and local taxes (up to $40,000 for 2025-2029)
- Mortgage interest (on up to $750,000 of debt)
- Charitable contributions
- Medical expenses exceeding 7.5% of income
- Mortgage insurance premiums
Rule of thumb for California homeowners: If you have a mortgage over $300,000 and pay California state taxes, you’re likely better off itemizing, especially with the new $40,000 SALT cap.
Real Estate Investment Tax Changes
If you’re a real estate investor or considering rental properties, here are the game-changing provisions:
100% Bonus Depreciation is Now Permanent
This is HUGE. Real estate investors can now take 100% first-year bonus depreciation on qualifying property indefinitely. No more phaseout.
What this means:
- Equipment, appliances, and personal property in rentals can be fully depreciated in year one
- Combined with cost segregation studies, you could significantly reduce taxable income
- This applies to property acquired and placed in service after January 19, 2025
New 100% Expensing for Production Real Property
Certain commercial real estate used for manufacturing and production can now be 100% expensed in the first year if:
- Construction begins between January 20, 2025, and December 31, 2028
- Property is placed in service by December 31, 2030
- It’s used for qualified production activities
Capital Gains on Home Sales: What’s Coming?
President Trump has floated the idea of eliminating capital gains taxes on home sales entirely. Currently, you can exclude:
- $250,000 of profit (single filers)
- $500,000 of profit (married filing jointly)
Any gains above these amounts are taxed at 0%, 15%, or 20% depending on your income, plus potentially 3.8% net investment income tax.
Status: This is NOT yet law, just a proposal. However, there’s congressional discussion about either raising or eliminating these caps entirely.
Who this would help: Long-term homeowners, especially in high-appreciation markets like California, where 34% of homeowners could exceed the $250,000 threshold.
What This Means for Lincoln, Placer County, and Sacramento Area Homeowners
Here in Lincoln and the Greater Sacramento area (Placer County, El Dorado County, Sacramento County), property taxes vary but generally run 1.1-1.3% of assessed value. Placer County’s effective tax rate is approximately 1.2%.
Lincoln, CA specific scenarios:
Scenario 1: First-Time Buyer in Lincoln
- Home value: $640,000 (close to Lincoln median)
- Annual property taxes: ~$7,680
- California state income tax (for $150K household): ~$9,500
- Total SALT: $17,180
Before 2025: Could only deduct $10,000 Now (2025-2029): Can deduct the full $17,180 Estimated annual federal tax savings: $2,154
Scenario 2: Move-Up Buyer in Twelve Bridges
- Home value: $850,000
- Annual property taxes: ~$10,200
- California state income tax (for $280K household): ~$22,000
- Total SALT: $32,200
Tax savings with new law: $6,660 per year
Scenario 3: Retiree in Sun City Lincoln Hills
- Home value: $705,000
- Annual property taxes: ~$8,460
- California state income tax (for pension/retirement income $120K): ~$7,000
- Total SALT: $15,460
Tax savings with new law: $1,638 per year
These are real savings for real Lincoln families!
Why This Matters for Lincoln CA Real Estate Right Now
The Lincoln real estate market is very competitive right now (homes selling in 22-29 days), and these tax savings make homeownership more affordable:
Example: Buying a $700,000 home in Sun City Lincoln Hills
- Monthly mortgage payment (6.26% rate, 20% down): ~$3,450
- Property taxes: ~$705/month
- Federal tax savings from new SALT cap: ~$350/month
- Net housing cost after tax savings: $3,805/month
That $350/month in tax savings = $4,200 per year = helps you qualify for a higher-priced home!
Important Dates and Deadlines
For 2025 Tax Returns (filed in 2026):
- SALT deduction cap: $40,000 (if income under $500,000)
- Standard deduction: $15,750 single / $31,500 married
- Energy credits available through December 31, 2025
Looking ahead:
- 2026-2029: SALT cap remains at $40,000 (increasing 1% annually)
- 2030: SALT cap reverts to $10,000 unless extended
Action Steps for Lincoln, CA Homeowners Right Now
Before December 31, 2025:
- Install solar or energy-efficient upgrades – Lincoln homes are perfect for solar with our California sunshine! Capture the 30% tax credit before it expires. I can recommend local solar installers I trust.
- Prepay January 2026 property taxes in December 2025 if it helps you maximize the $40,000 SALT deduction for 2025 (check with your CPA first)
- Document all capital improvements to your Lincoln home – new roof, HVAC, kitchen remodel, pool, landscaping (these reduce capital gains when you sell)
- Run the numbers with a tax professional to see if you should itemize. Most Lincoln homeowners with a mortgage over $500K should itemize.
For Lincoln Homebuyers in 2025-2026:
- Factor in the tax savings when determining your budget – that extra $300-$600/month from SALT deductions can help you afford more home
- Consider neighborhoods strategically – Higher-value communities like Catta Verdera and Twelve Bridges offer bigger tax savings with the new SALT cap
- Time your purchase – With Lincoln inventory up 35% year-over-year, you have more negotiating power now than in recent years
For Lincoln Home Sellers:
- Price strategically – Lincoln’s competitive market (22-29 days on market) means well-priced homes still get multiple offers
- Highlight tax benefits – When marketing your Lincoln home, emphasize the property tax deductibility advantage to buyers
- Track your improvements – Keep all receipts for capital improvements to reduce capital gains taxes when you sell
Lincoln CA Neighborhoods I Serve
As a Lincoln CA realtor specializing in Placer County, I have deep expertise in these communities:
Lincoln, CA:
- Sun City Lincoln Hills (55+ active adult community)
- Twelve Bridges (family-friendly master plan)
- Esplanade at Turkey Creek (55+ resort lifestyle by Taylor Morrison)
- Bickford Ranch (master plan with Trilogy 55+, Toll Brothers luxury homes, and Tri Pointe Homes)
- Lincoln Crossing
- Foskett Ranch
Nearby Placer & Sacramento County Communities:
- Granite Bay
- Roseville
- Rocklin
- Loomis
- Folsom
- El Dorado Hills
Each community has different property tax rates and home values, which dramatically affects your SALT deduction strategy. Let me help you find the right fit for your budget AND tax situation.
Common Questions About Real Estate Tax Deductions
Q: Can I deduct property taxes on my rental property? A: Yes! Rental property taxes are 100% deductible as a rental expense. They’re NOT subject to the $40,000 SALT cap, which only applies to personal residences.
Q: Are HOA fees tax deductible? A: No, HOA fees for your primary residence are not deductible. However, HOA fees for rental properties ARE deductible as rental expenses.
Q: Can I deduct home improvements? A: Generally no, but they ADD to your cost basis, reducing capital gains when you sell. Energy-efficient improvements may qualify for tax credits (through 2025 only).
Q: What about vacation homes? A: If you don’t rent it out, you can deduct mortgage interest and property taxes (subject to SALT cap). If you DO rent it out, different rules apply based on personal use days.
Q: Do I need receipts for property tax deductions? A: Yes! Keep your property tax bills, mortgage statements showing escrow payments, and any direct payments to your county tax collector.
The Bottom Line
Real estate taxes ARE deductible, and the new “One Big Beautiful Bill” significantly increases the benefit for homeowners in high-tax states like California. The temporary increase in the SALT deduction cap to $40,000 (2025-2029) could save middle-to-upper income homeowners thousands of dollars annually.
However, tax planning is complex and individual circumstances vary. The examples here are general guidance, not personalized advice.
My recommendation: Meet with a qualified tax professional or CPA before December 31, 2025, to:
- Determine if you should itemize or take the standard deduction
- Maximize energy credits before they expire
- Plan property tax payments strategically
- Understand how these changes affect YOUR specific situation
Read More about the Big Beautiful Bill Here!
https://www.congress.gov/bill/119th-congress/house-bill/1/text
About Jaydee Sheppard – Your Lincoln CA Realtor
I’m a local real estate agent living right here in Catta Verdera, Lincoln, CA, serving Placer County and Sacramento County communities. I specialize in:
✅ Lincoln, CA real estate – Sun City Lincoln Hills, Twelve Bridges, Catta Verdera, Verdera ✅ Placer County – Granite Bay, Roseville, Rocklin, Loomis ✅ Sacramento County – Folsom, El Dorado Hills ✅ First-time homebuyers in Lincoln and Placer County ✅ 55+ communities – Sun City Lincoln Hills expert ✅ Luxury homes – Catta Verdera, Twelve Bridges, Verdera specialist ✅ Investment properties throughout the Greater Sacramento area
Why work with a local Lincoln CA realtor?
- I live here and know the neighborhoods intimately
- Deep knowledge of Placer County property taxes and HOA structures
- Understanding of Lincoln’s unique master-planned communities
- Connections to trusted local lenders, inspectors, contractors, and tax professionals
- Up-to-date on Lincoln market conditions and pricing strategies
While I provide this tax information to help educate Lincoln homeowners and buyers, I always recommend consulting with tax professionals for personalized advice.
Thinking about buying or selling in Lincoln, CA or Placer County? The combination of current mortgage rates (around 6.26%), increased inventory (up 35% in Placer County!), and these new tax benefits makes now an interesting time to explore your options.
Contact Jaydee Sheppard – Lincoln CA Realtor: 📞 916-367-8885 📧 [email protected] 🏠 Gateway Properties | DRE #01790329 📍 Serving Lincoln, Placer County & Sacramento County
Current Lincoln CA Market Stats (October 2025):
- Median home price: $637K-$718K
- Days on market: 22-29 days
- Inventory: 236+ active listings
- Market status: Very competitive
Frequently Asked Questions – Lincoln CA Real Estate & Taxes
Q: What’s the property tax rate in Lincoln, CA? A: Placer County’s effective property tax rate is approximately 1.2% of assessed value. A $700,000 home in Sun City Lincoln Hills would have annual property taxes of about $8,400.
Q: Are HOA fees tax deductible in Lincoln communities like Sun City Lincoln Hills or Twelve Bridges? A: No, HOA fees for your primary residence are not tax deductible, even in communities with extensive amenities like Sun City Lincoln Hills. However, the amenities can increase your home’s value!
Q: How do Lincoln CA home prices compare to other Placer County cities? A: Lincoln’s median home price ($637K-$718K) is slightly lower than Granite Bay ($1M+) but comparable to Roseville and Rocklin. You get more space and newer construction in Lincoln.
Q: Should I buy in Sun City Lincoln Hills or a different Lincoln neighborhood for tax purposes? A: The tax deductions are similar regardless of Lincoln neighborhood. Your choice should be based on lifestyle (55+ active adult vs. family community), amenities, and home style preferences. Call me to discuss what fits your needs!
Q: Can I deduct property taxes on a second home in Lincoln? A: Yes! Property taxes on a second home are deductible, subject to the same $40,000 SALT cap (which includes taxes from ALL properties combined).
Q: What are the best Lincoln CA neighborhoods for investment properties? A: Twelve Bridges and areas near Thunder Valley Casino see good rental demand. Sun City Lincoln Hills has restrictions on rentals. Let’s discuss your investment goals!
Q: How competitive is the Lincoln real estate market right now? A: Very competitive! Homes are selling in 22-29 days on average (October 2025). With inventory up 35% year-over-year in Placer County, buyers have more choices than last year, but well-priced homes still get multiple offers.
Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex and change frequently. Please consult with a qualified CPA, tax attorney, or financial advisor for advice specific to your situation. Information current as of October 2025. Jaydee Sheppard is a licensed California real estate agent (DRE #01790329) serving Lincoln, Placer County, and Sacramento County