Why assessments are climbing
If your new bill stung, you have company. Not only were many owners caught off guard, but the hikes are outpacing broader inflation. Three forces are doing the heavy lifting.
First, local governments facing revenue gaps are turning the dial up on rates even when home prices are not the culprit. In some high demand areas, they are also aiming new levies at affluent owners. New York City's floated pied-à-terre surcharge on homes worth more than $5 million is the poster child.
Second, there is a quiet handoff from commercial to residential taxpayers. With office vacancies still elevated, commercial landlords are winning appeals that cut their assessments. Cities then look to homeowners to close the hole.
Third, a federal change is reshaping the deduction math. The One Big Beautiful Bill Act of 2025 lifts the SALT cap to $40,400 starting in 2026, but adds a sharp 30 percent phase-out for those with Modified Adjusted Gross Income above $505,000. For higher earners, the benefit can quickly compress back to a $10,000 floor, blunting the relief just as state and local bills rise.
How to challenge a high assessment
You are not stuck with the number on the notice. A formal appeal can work, especially in high tax areas where win rates often land between 10 percent and 20 percent. The core question is fairness and comparables. If your assessed value does not match recent sales of similar homes nearby, you have a case.
Specialists help. A property tax attorney or seasoned appraiser can assemble the comparable sales package and deliver it to the local review board, which meaningfully improves the odds.
Property assessments move on their own schedule, and most owners only find out when the bill lands. Market Briefs explains what drives them, free every weekday.
Tax moves that can protect SALT and cash flow
There is also planning room on the income side. Every dollar of MAGI above $505,000 trims 30 cents from your SALT deduction until you reach the $10,000 minimum, which makes smoothing income a year-round project rather than a December scramble.
Meeting with your accountant every quarter can uncover tactics such as boosting 401(k) and HSA savings, pushing bonus payouts into the following year, harvesting capital losses, or bunching charitable giving via a donor-advised fund. Those steps can keep thousands of dollars of deduction from vanishing.
If your income sits well beyond the phase-out, entity-level strategies may help. Many states offer Pass-Through Entity Tax regimes so taxes are paid by the business and treated as deductible costs before profits flow to you, which can sidestep the individual SALT cap. Holding residential or investment property in a multi-member LLC or an S-Corp can enable this path, but it calls for tight collaboration between tax counsel and your accountant.
Owners of investment real estate should also revisit cost segregation now that the OBBBA permanently restored 100 percent bonus depreciation. Faster write-offs can offset active income and boost liquidity for unavoidable bills. And if an asset's carrying cost no longer pencils out, a Section 1031 exchange can defer capital gains while moving equity into a more tax efficient property, including options like a Delaware Statutory Trust or a Section 721 UPREIT that swaps bricks and mortar for diversified REIT shares.
The bottom line for your wallet
Rising property taxes are not a fixed fate. Between appealing the assessment, dialing in income around the SALT rules, and using entity and real estate tools, many owners can trim what they owe. Taken together, these tactics may cut what you owe before year-end. Connect with your Wealth Manager to talk through the details.
A reassessment can change your monthly payment more than refinancing would. Join Market Briefs free and see these shifts before the bill does.
