Tessa Distor

Disclaimer: This is a general discussion of tax-related issues that may affect real estate. It is not specific tax advice. Always consult with a qualified tax professional for guidance on your personal situation.

Why OBBBA Matters to Real Estate

In real estate, tax policy isn’t just background noise — it directly shapes affordability, buyer confidence, investment strategies, and even the pace of transactions in markets like California. When the Tax Cuts and Jobs Act (TCJA) passed in 2017, many of its provisions were set to expire in 2025. That looming sunset created uncertainty for buyers and sellers alike.

The One Big Beautiful Bill Act (OBBBA) provides clarity. It extends and in some cases makes permanent the provisions most critical to homeowners and investors. For those of us watching the California market closely, this is more than just a tax update — it’s a signal of stability and opportunity.

Key Highlights — Through a Real Estate Lens

📊 Lower Tax Brackets Extended

Lower income tax rates mean more disposable income. In California, where affordability is always a challenge, every saved dollar counts toward mortgage qualification and long-term homeownership stability.

🏡 Standard Deduction Increased

The higher standard deduction simplifies tax filings for many households, but it also reshapes who actually benefits from itemizing deductions like mortgage interest or SALT. As a broker, I see this influencing whether certain buyers lean toward ownership vs. renting, especially first-time buyers.

👶 Child Tax Credit Expanded

The increase to $2,500 per child (through 2028) eases financial pressure on families — which directly supports housing demand in family-oriented markets like the San Fernando Valley and Orange County.

🏠 Mortgage Interest Deduction (MID)

The MID cap remains at $750,000 for post-2017 mortgages. In high-priced markets like Los Angeles, that cap matters. Buyers financing above that range need to factor in the lost deduction when weighing affordability. Still, this provision is crucial in keeping move-up buyers active.

💵 SALT Deduction Expanded (Temporarily)

Raising the SALT cap from $10,000 to $40,000 (through 2029) is one of the most meaningful changes for Californians. Property taxes here are substantial, and this temporary expansion increases the likelihood of homeowners feeling the tax benefit of ownership. That can influence retention rates (staying put vs. selling) and investment appetite.

🏢 Qualified Business Income (QBI) Deduction

For real estate professionals and property owners operating through S-Corps, LLCs, or partnerships, the 20% QBI deduction remains a significant planning tool. This is where working with a CPA becomes essential — structuring correctly can mean the difference between preserving capital or overpaying in taxes.

🔁 1031 Exchanges (Like-Kind) Protected

OBBBA keeps 1031 exchanges intact for real property, which is critical for California investors looking to scale without triggering capital gains tax. In a state where appreciation is steep, this provision fuels reinvestment and keeps inventory moving.

💰 Capital Gains Exclusion Still in Place

No change: homeowners can still exclude up to $250,000 ($500,000 for married couples) on the sale of a primary residence. This rule is one of the most powerful wealth-building tools in real estate — but it hasn’t been updated since 1997. In high-appreciation markets, that gap between exemption and actual gains continues to grow, making strategic timing of sales more important.

What This Means for California’s Market

1. Homeowners: Extended deductions and credits keep ownership more affordable, reinforcing stability in established neighborhoods.

2. Buyers: More favorable tax treatment means stronger purchasing power, particularly for middle-income households.

3. Investors: The preservation of 1031 exchanges and QBI deductions continues to make California real estate attractive for portfolio growth.

NAR’s Legislative Wins That Impact You

According to the National Association of REALTORS®, OBBBA secures several major priorities for our industry:

• Permanent lower individual tax rates

• Permanent QBI deduction (Section 199A)

• Temporary expansion of the SALT deduction cap

• Protection of 1031 exchanges

• Permanent mortgage interest deduction

In other words: the tax landscape remains pro-homeownership and pro-investment. Tax policy doesn’t just live in spreadsheets — it shows up in how my clients make decisions every day:

• Whether a young family can stretch to buy their first home in Santa Clarita.

• Whether a long-time owner in Burbank decides to downsize or hold.

• Whether an investor in Oxnard reinvests through a 1031 or cashes out.

The One Big Beautiful Bill Act provides certainty where there was doubt. And in real estate, certainty fuels confidence — and confidence drives markets.

If you’re weighing a move, investment, or sale, now is the time to map out not only your real estate strategy but also your tax strategy. Done right, these provisions can give you a significant advantage.

Broker’s Perspective: Tessa’s Take

When I study the One Big Beautiful Bill Act, I see more than policy updates — I see how it reshapes the choices my clients face:

• First-time buyers gain breathing room with higher deductions and credits, potentially tipping the scales toward ownership.

• Move-up buyers in high-cost markets must weigh the unchanged mortgage interest cap carefully — balancing borrowing with long-term stability.

• Investors continue to benefit from 1031 exchanges and QBI deductions, keeping their path to wealth-building open.

As a broker, I don’t just help people transact — I help them align market opportunities with tax strategy, so every move is part of a smarter long-term plan.

👉 Let’s talk about how these changes might shape your next real estate move. Visit me at Agency411Realty.com — I’ll help you connect the dots between policy, property, and profit.

Are you a first-time homebuyer feeling overwhelmed by the current real estate landscape? While the market may seem daunting, purchasing a home right now offers incredible benefits that can set you on a path to financial success. Let’s delve into why buying a home valued at $550,000 with a 5% down payment and a 6.75% interest rate could be your best investment decision, especially if you plan to stay for 5 to 15 years.

1. Tax Benefits that Ease Your Burden

One of the most attractive advantages of homeownership is the tax benefits. As a homeowner, you can write off mortgage interest and property taxes, significantly reducing your taxable income. This deduction can provide you with substantial savings when tax season rolls around, easing your overall financial burden.

2. Building Equity through Principal Paydown

Each monthly mortgage payment chips away at your loan, allowing you to build equity in your home. This is money that you would never see if you were renting. In contrast, every rent payment simply goes to your landlord. Over time, this equity can become a substantial asset, providing you with financial security and options for the future.

3. Refinance Options When Rates Drop

Interest rates fluctuate, and when they drop (and we’re confident they will!), you have the opportunity to refinance. Imagine bringing your monthly payment down from approximately $4,500 to around $3,800 if rates hit 5%. This flexibility can provide considerable savings and enhance your financial situation in the long run.

4. Price Uncertainty and Market Growth

The real estate market is ever-changing, and predicting where prices will be in 5 to 15 years is challenging. Waiting to buy could mean missing out on today’s growth. Investing now locks in your home’s appreciation potential, allowing you to benefit from value increases while you live in your home.

5. The Case Against Renting

Currently, renting a property valued at $550,000 may cost you about $3,200 per month. Fast forward five years, and that rent could rise to approximately $3,700, and to $4,300 in ten years, assuming a 3% increase each year. By buying a home, you not only stabilize your monthly payments but also invest in your future instead of someone else’s mortgage.

Best Line:

“Buy now, lock in appreciation, and refinance when rates ease—renting just pays someone else's mortgage!”

In conclusion, becoming a first-time homebuyer in today’s market offers numerous advantages that can lead to financial stability and growth. From tax benefits to the ability to build equity and take advantage of refinancing, the opportunities are abundant. Don’t let the current market deter you; instead, seize the moment and invest in your future today!

As we enter May 2025, the Los Angeles County real estate market presents promising opportunities for both buyers and sellers. However, current trends particularly favor buyers ready to make informed decisions.

📊 Market Snapshot

• Median Home Price: Approximately $850,000, reflecting a 3.8% increase year-over-year. 

• Inventory Levels: Active listings have risen by 7% from March to April 2025, offering buyers a broader selection of properties.

• Interest Rates: Mortgage rates have decreased to an average of 5.85% for a 30-year fixed loan, enhancing affordability.

• Market Activity: 67% of homes sold within 30 days in April, indicating strong demand for well-priced, move-in-ready homes.

💡 Why Buyers Should Consider Purchasing Now

1. Favorable Interest Rates

The recent decline in mortgage rates means lower monthly payments and increased purchasing power, making homeownership more accessible.

2. Increased Inventory

With more homes on the market, buyers have a wider array of options and greater negotiating leverage, reducing the pressure of bidding wars.

3. Long-Term Investment Potential

Despite market fluctuations, real estate in Los Angeles County has consistently appreciated over time, offering a reliable avenue for building wealth and equity.

4. Tax Advantages

Homeownership provides tax benefits, such as deductions on mortgage interest and property taxes, contributing to long-term financial savings.

🏠 For Sellers

While the market is becoming more balanced, sellers can still achieve favorable outcomes by pricing competitively and ensuring their homes are market-ready. The sustained demand indicates that well-presented properties are likely to attract serious buyers promptly.

Ready to Make Your Move?

Whether you're looking to buy your first home, upgrade, or sell your current property, now is an opportune time to act. With the current market dynamics, informed decisions can lead to significant long-term benefits.

Contact Tessa Distor | Broker, Agency411 Realty

📞 (818) 571-0850
📧 info@agency411inc.com
🏡 Serving Los Angeles County & Santa Clarita Valley

Discover What It Really Means, Why It Matters, and How to Navigate It Like a Pro.

💭 Dreaming of Homeownership?

You’re scrolling listings at midnight, imagining life in your dream home—until your agent says:

“Let’s get started! Just sign this Buyer Representation and Broker’s Compensation Agreement first.”

Wait… what? 😳

If that made you pause, you’re not alone. But before you ghost your dream home, let’s break this down—simple, clear, and pressure-free.

🧾 What Is a Buyer Representation Agreement?

Think of it as a mutual agreement between you and your real estate agent.

✅ You agree to work exclusively with your agent.
✅ Your agent agrees to advocate for you, negotiate fiercely, and protect your best interests.
✅ You both understand how your agent will be paid (usually by the seller).

It’s about clarity, trust, and professional commitment—not locking you into anything scary.

📅 Do I Have to Sign One?

Yes—as of 2024 in California, it's required before viewing properties in person. The industry is shifting to create more transparency and professionalism.

But good news:
📌 You can customize the agreement—duration, location, even commission terms.
📌 It ensures you’re represented in one of the biggest purchases of your life.

💸 Who Pays the Commission?

In most cases, the seller covers the commission—but this is evolving. In the post-2024 real estate world, buyers may need to negotiate this upfront.

That’s where the Broker’s Compensation Agreement comes in—it sets clear expectations and helps avoid surprise fees down the road.

👀 Still Not Sure?

That’s okay. Maybe you:

1. Want to browse casually

2. Don’t want to feel "locked in”

3. Had a bad past experience
   

I hear you.

I work with buyers at all stages. Whether you’re ready to sign today or just curious, I’m here to answer your questions with zero pressure.

✨ Let’s Simplify the Process

Buying a home should feel exciting—not confusing. A Buyer Representation Agreement is just the start of a strong, protected, and professional relationship.

I’m here to:

• Break down the fine print

• Guide you through your options

• Help you buy with confidence
  

Homeownership is one of life’s most meaningful milestones — and navigating the fine print shouldn’t stand in your way. A Buyer Representation Agreement isn’t a roadblock; it’s a tool to protect your interests, ensure professional advocacy, and clarify how the process works in today’s evolving market.

✨ Whether you're ready to dive in or just gathering information, I’d love to hear where you’re at. What questions do you still have about this process, or what’s holding you back from taking the next step? Let’s talk — no pressure, just honest guidance.