The “Big Beautiful Bill” and What It Means for Buying a Second Home or Investment Property in Mammoth Lakes

You may have heard recent headlines about the “Big Beautiful Bill” and wondered what it actually means — especially if you’re considering buying a second home or investment property in Mammoth Lakes.

While tax legislation can feel overwhelming, this bill introduces several provisions that bring more certainty and potential advantages for real estate buyers and investors. Below is a high-level look at what matters most and how it may impact purchasing property in a mountain resort market like Mammoth Lakes.

What Is the “Big Beautiful Bill”?

The One Big Beautiful Bill Act is a federal tax and budget law passed in 2025 that makes several real-estate-related tax provisions permanent and enhances others. The biggest takeaway for buyers and investors is stability — many tax rules that were previously set to expire are now locked in, making long-term planning easier.

Key Provisions That Matter for Second Homes and Investment Properties

1. Mortgage Interest Deduction: Now Permanent

Mortgage interest on acquisition debt continues to be deductible for those who itemize, including for second homes and investment properties.

Why this matters in Mammoth Lakes:
Second homes and mountain properties often carry larger loan balances. Knowing this deduction isn’t going away helps buyers better project long-term ownership costs.

2. Higher SALT Deduction Cap (Temporarily)

The State and Local Tax (SALT) deduction cap — which includes property taxes — has been increased above the long-standing $10,000 limit for qualifying taxpayers through 2029.

Why this matters locally:
California property taxes can be meaningful, especially for higher-value homes. A higher SALT cap may allow buyers to deduct more of their Mammoth Lakes property taxes at the federal level.

3. Strong Incentives for Rental and Investment Properties

For buyers using a property as a rental (full-time or part-time), the bill includes some notable benefits:

• 100% bonus depreciation for qualifying improvements placed in service after 2025

• The 20% Qualified Business Income (QBI) deduction for rental income is now permanent

Why this matters:
These provisions can significantly reduce taxable income, particularly in the early years of ownership or after making improvements.

4. Expanded Long-Term Investment Programs

The bill also strengthens tools like Opportunity Zones and housing tax credits. These are generally more relevant for developers or larger investment strategies, but they reinforce continued interest in resort and recreation-driven markets.

5. Increased Estate and Gift Tax Exemptions

The federal estate and gift tax exemption has been permanently increased, allowing more real estate value to pass to heirs without federal estate tax.

Why this matters:
For families purchasing or holding Mammoth Lakes property as a long-term or legacy asset, this can be an important planning tool.

What This Means for Mammoth Lakes Buyers

Second-Home Buyers

• More predictability when evaluating long-term ownership costs

• Potentially greater benefit from itemizing deductions

• Increased confidence in long-term planning

Investment Property Buyers

• Stronger depreciation and income deduction tools

• Improved ability to offset rental income

• Greater clarity when evaluating returns

A Mammoth Lakes–Specific Example

Let’s look at a common scenario we see in Mammoth Lakes:

A buyer purchases a two-bedroom condo near Canyon Lodge. They plan to use the property personally for ski season and summer trips, while renting it as a short-term rental the rest of the year.

Depending on how many days the property is rented versus used personally:

• A portion of mortgage interest and property taxes may be allocated to the rental use

• Depreciation may apply to the rental portion of the home

• Rental income may qualify for the 20% QBI deduction, reducing taxable income

• If improvements are made — such as updating flooring, appliances, or furnishings — bonus depreciation may allow certain costs to be deducted sooner rather than spread out over many years

For buyers considering a similar use, the Big Beautiful Bill provides more certainty that these rules will remain in place, making it easier to plan ownership with a longer-term view.

How these benefits apply depends heavily on usage, income, and personal tax circumstances — which is why early conversations with a CPA are so important.

The Bottom Line

The Big Beautiful Bill doesn’t change the fundamentals of buying real estate in Mammoth Lakes — lifestyle, location, and long-term goals still matter most. What it does provide is greater clarity and continuity around tax treatment, which can make second-home and investment purchases more attractive when structured thoughtfully.

Important Note on Taxes

While we stay informed on how changes like the Big Beautiful Bill may impact real estate decisions, we are not tax professionals. Tax laws are complex, and how they apply can vary widely based on your personal situation, how a property is used, and your long-term goals.

Before making any decisions related to tax incentives, deductions, or investment strategies, we strongly encourage buyers to consult with their CPA or accountant. A trusted tax advisor can help you understand how these changes apply specifically to you and ensure you’re making informed choices.

We’re always happy to collaborate with your CPA as part of the buying process so your real estate and tax strategies align.