Arizona homeowners and taxpayers have a reason to celebrate as the One Big Beautiful Bill Act (OBBBA) officially becomes law in the Grand Canyon State. This new legislation delivers numerous financial benefits directly to Arizona residents, providing much-needed tax relief and housing incentives. Local financial experts are already calculating the positive impact this will have on family budgets across Phoenix, Tucson, and smaller communities throughout the state.
The OBBBA represents a significant victory for Arizona’s real estate market and homeowners. With the state’s rapidly growing population and competitive housing market, the new law addresses several key concerns for current and prospective homeowners. Industry organizations including the Arizona Association of REALTORS® have praised the legislation for its permanent protections of vital tax benefits that Arizona families have come to rely on while also introducing innovative new programs designed to make homeownership more accessible.
- Central to the OBBBA is the permanent extension of the 2017 personal income tax rates that were previously scheduled to expire after 2025. For Arizona families, this means predictability in tax planning with the highest marginal rate remaining at 37%. The legislation also includes inflation adjustments for lower tax brackets, directly benefiting middle-class Arizonans. A Phoenix family of four earning $85,000 annually could save approximately $2,200 per year compared to what they would have paid if the rates had been allowed to expire.
Additionally, Arizona taxpayers will benefit from the permanently increased standard deduction, nearly doubled to $15,750 for single filers and $31,500 for joint filers. This change is particularly advantageous in communities like Peoria, where many residents previously found themselves on the borderline between itemizing and taking the standard deduction. The additional $6,000 deduction for seniors through 2028 provides extra relief for Arizona’s substantial retirement community, with estimates suggesting this could save retired homeowners in places like Sun City an average of $1,320 in federal taxes annually.
The OBBBA delivers substantial mortgage-related benefits to Arizona homeowners through permanent protection of the mortgage interest deduction. This tax advantage is especially valuable in the state’s higher-priced housing markets where many homes carry larger mortgages. First-time homebuyers will particularly benefit during the initial years of homeownership when mortgage payments are primarily interest.
Local small business owners and real estate professionals across Arizona have reason to celebrate with the permanent protection of qualified business income deductions. This provision allows deductions of up to 20% of qualified business income from federally taxable income, a significant advantage for the state’s numerous independent contractors, gig workers, and small businesses. A real estate agent in Tucson earning $85,000 annually could save approximately $3,700 in federal taxes through this deduction, money that can be reinvested into growing their business.
Perhaps most innovative is the introduction of “Trump Accounts” for down payments, which will benefit Arizona’s next generation of homebuyers. Every child born between 2025-2028 will receive a $1,000 tax-deferred savings account invested in index funds, with parents able to contribute up to $5,000 annually tax-free. For Arizona’s growing families, this program could potentially provide thousands of dollars toward a first home purchase by the time their children reach adulthood, helping to address affordability challenges in the state’s competitive housing market.
