The U.S. Senate worked into the early hours this morning trying to hash out its version of President Trump’s Big Beautiful Bill, and there are marked differences between the House of Representatives’ and Senate’s versions of the legislation.
Update 7/1/2025: The Senate passed its version of the bill around noon on Tuesday, July 1, according to The Hill, after voting over the weekend to move the bill forward and going through a 27-hour marathon of amendment-voting to hash out what would go into its legislation. The Senate's finalized bill came to a tie vote, and Vice President JD Vance was on hand to cast the deciding vote to pass the legislation 51-50.
The House is now expected to take up the Senate bill and vote on it in the coming days. As it stands, there are major differences between the Senate version and what the House passed on May 22.
The White House is calling for, and the House and Senate have been working toward, a July 4 deadline to pass the "megabill" — and whether that can be done remains to be seen.
SALT Write-Offs
One key deviation in the House-Senate versions that affects homeownership and the cost of owning a house is the tax deduction for state and local taxes, popularly known as “SALT” write-offs.
The deduction includes property taxes, which are rising in most jurisdictions and are causing some would-be buyers to rethink their decisions about moving forward with plans for a purchase.
At the same time, some current owners are heading into default of their mortgages because they can no longer afford to pay their property taxes and rising homeowner’s insurance premiums.
That, of course, is what the debate is really all about: how much lawmakers will add to the federal budget deficit.
Currently, taxpayers can write off $10,000 in SALT taxes. But the House, spurred on by members in high tax states like New York, New Jersey, and California, voted to raise the ceiling to $40,000 for those earning up to $500,000 annually.
The Senate is considering a version of the BBB that would do the same. But rather than making the deduction permanent, as the House wants to, the Senate would allow the write-off to expire in 2030. The deduction would be limited to a max of $10,000 per year for those earning more than $500,000 in both bills.
Even though the Senate measure does not make the deduction permanent, it is actually “more generous,” according to the Committee for a Responsible Federal Budget (CRFB), because, among other things, it allows for work-arounds for the wealthy.
If the write-off were to be made permanent, the CRFB estimates, the Senate changes would cost a net of $325 billion, while the House changes would cost roughly $200 billion. And that, of course, is what the debate is really all about: how much lawmakers will add to the federal budget deficit.
MIP Deduction
Meanwhile, a provision slipped into the Senate version that would affect many homeowners remains on the table — at least for now. That particular language would reinstate and make permanent the deductibility of mortgage insurance premiums. It also raises the income ceiling for eligibility from $100,000 to $200,000, meaning more borrowers could qualify.
However, whether the write-off will hold in the Senate and pass muster in the House is anyone’s guess. While the idea is said to have enjoyed the support of legislators in both chambers and on both sides of the aisle, repeated attempts to resurrect the deduction have failed since it was allowed to expire in 2021.
On the other hand, the measure was added to the BBB by Senate Finance Committee Chairman Mike Crapo (R-ID), who holds a lot of sway on how the overall bill proceeds.
And earlier this year, Rep. Vern Buchanan (R-FL), second in charge at the House Ways and Means Committee, along with several co-sponsors, tossed a similar bill into the hopper in their chamber.
During its 14-year run, the mortgage insurance premium, a.k.a. MIP, deduction was claimed 44 million times, representing a combined $65 billion in write-offs.
Prior to the write-off’s expiration four years ago, borrowers who put less than 20% down on their mortgages could write off at least a portion of the insurance premiums lenders require to protect them against default.
Seth Appleton, president of U.S. Mortgage Insurers (USMI), calls the write-off a “smart, targeted tax deduction that would help low-down-payment homeowners keep more of their tax dollars.”
But it is expensive, and with lawmakers grappling with a BBB that would add billions to the budget deficit, the prospects in that regard don’t look good.
During its 14-year run, the mortgage insurance premium, a.k.a. MIP, deduction was claimed 44 million times, representing a combined $65 billion in write-offs, by USMI’s count. That works out to an average annual deduction of $1,454 per qualified taxpayer.
On average, some 3.4 million taxpayers claimed the deduction in any given year.
