In the nation’s capital, high housing costs and rising property taxes have made the $10,000 federal cap on state and local tax (SALT) deductions feel particularly restrictive. But with Congress raising that cap to $40,000, many homeowners across Washington, D.C., will find long-overdue relief.

Realtor.com® economists estimate that 15.6% of D.C. homeowners previously exceeded the $10,000 cap. That number will drop to just 2.5% under the new $40,000 limit—a dramatic reduction that could reshape the tax experience for residents of this urban market.

“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”.