Living in paradise has never come cheap. And for many Hawaii homeowners, the $10,000 federal SALT deduction cap compounded the cost of high property taxes and living expenses. But with Congress approving a new $40,000 deduction ceiling, residents in high-cost parts of the islands could see some long-overdue tax relief.

Realtor.com® data show that 7.7% of Hawaii homeowners exceeded the $10,000 cap under the previous rule. That number drops significantly under the new limit, with just 0.6% expected to exceed $40,000 in property tax deductions.

“Residents of high-tax states suffered the most with the previous cap on state and local taxes,” says Colin Allen, executive director of the American Property Owners Alliance. “Because their taxes far exceeded the cap, they were not able to deduct the full amount like residents in low-tax states”.