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

You may have seen 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 changes that bring more clarity and long-term stability to the tax landscape. Below is a high-level overview of the provisions most relevant to second-home buyers and real estate investors, with a focus on how they may apply in a mountain resort market like Mammoth Lakes.

What Is the “Big Beautiful Bill”?

The One Big Beautiful Bill Act, passed in 2025, is a federal tax and budget law that extends or makes permanent several tax provisions originally introduced under earlier tax reforms. For real estate buyers and investors, the most important theme is certainty — fewer expiring provisions and more consistency for long-term planning.

Key Provisions That May Impact Second Homes and Investment Properties

1. Mortgage Interest Deduction: Status Quo, Now More Predictable

The bill does not create a new mortgage interest deduction, but it preserves the existing framework for mortgage interest on acquisition debt for those who itemize deductions. This can include interest on second homes, subject to current IRS rules.

Why this matters in Mammoth Lakes:
Second homes in resort markets often involve larger loan balances. While the deduction itself hasn’t expanded, the lack of major changes provides more predictability for buyers planning long-term ownership.

2. Higher SALT Deduction Cap (Temporarily)

One of the most notable changes is a temporary increase to the State and Local Tax (SALT) deduction cap, raising it above the long-standing $10,000 limit for qualifying taxpayers through 2029. Income-based phaseouts apply.

Why this matters locally:
California property taxes and state income taxes can add up quickly. For some buyers, this higher cap may allow more of their Mammoth Lakes property taxes to be deductible at the federal level, improving after-tax ownership costs.

3. Bonus Depreciation for Investment Properties

For investment real estate owners, the bill restores 100% bonus depreciation for qualifying property placed in service after early 2025. This applies primarily to certain improvements and components identified through cost segregation, not to the structure itself.

Why this matters:
This can allow investors to accelerate depreciation deductions, potentially reducing taxable income in the early years of ownership. Eligibility depends on how the property is used and how improvements are categorized.

4. Rental Income and Business Deductions (With Important Caveats)

The law preserves the broader framework around business and rental income deductions, including the 20% Qualified Business Income (QBI) deduction, where applicable.

However, not all rental activity qualifies as a trade or business under IRS rules. Whether rental income qualifies depends on factors such as level of activity, services provided, and ownership structure.

Why this matters:
For some investors, this deduction may reduce taxable rental income — but it is not automatic and should be reviewed carefully with a CPA.

5. Long-Term Investment and Estate Planning Tools

The bill also:

• Preserves and enhances Opportunity Zone investment programs

• Permanently increases the federal estate and gift tax exemption (often cited around $15 million per individual, indexed for inflation)

Why this matters:
For buyers holding Mammoth Lakes property as a long-term or legacy asset, these provisions can be relevant when coordinating real estate, investment, and estate planning strategies.

What This Means for Mammoth Lakes Buyers

Second-Home Buyers

• Greater predictability around itemized deductions

• Potential benefit from a higher SALT cap

• More clarity when projecting long-term ownership costs

Investment Property Buyers

• Possible accelerated depreciation on qualifying improvements

• Continued availability of certain rental income deductions

• Improved confidence when modeling long-term returns

A Mammoth Lakes–Specific Example

Consider a common scenario in Mammoth Lakes:

A buyer purchases a two-bedroom condo near Canyon Lodge. They use the property personally during peak ski season and summer, while renting it short-term for part 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 rental use

• Depreciation may apply to the rental portion of the property

• Certain improvements (such as appliances or flooring) may qualify for bonus depreciation

• Rental income may qualify for business-related deductions, depending on how the property is operated

The Big Beautiful Bill doesn’t eliminate the complexity of these rules, but it does provide more confidence that the underlying tax framework will remain in place, making long-term planning easier.

The Bottom Line

The Big Beautiful Bill does not fundamentally change how real estate works in Mammoth Lakes — lifestyle, location, and long-term goals still drive buying decisions. What it does provide is greater clarity and continuity around several tax provisions that affect second homes and investment properties.

For buyers who approach ownership thoughtfully and with the right professional guidance, these changes may support more informed and confident decisions.

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 tax professional. 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.

Resources & Further Reading

For readers who would like to explore the topic further, the following resources provide detailed summaries and professional analysis:

• National Association of REALTORS® – Big Beautiful Bill: Real Estate Tax Impacts

• Tax Foundation – Overview of Federal Tax Changes Under the One Big Beautiful Bill Act

• Urban Land Institute – Implications for Housing, Investment, and Development

• IRS – Publication 527 (Residential Rental Property) and Publication 535 (Business Expenses)