Offsets Effectively Lower Property Taxes

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YES Is Your Property Tax Safe Harbor

High property taxes aren't just a New York, New Jersey, or Illinois problem. It's becoming an ever-increasing problem all across the country and for all types of property: personal residence, investment, and business.

Across the country, households earning $500,000 or more are absorbing a growing share of rising local tax burdens — often without the relief valves available to lower-income homeowners. Understanding why matters as much as knowing what to do about it.

The SALT (State And Local Taxes) Cap Phase-Out

For years, the SALT deduction cap was a flat $10,000 — a number every high-tax-state homeowner learned to resent. That changed in 2025: the cap was raised substantially, to $40,000, rising 1% annually through 2029 ($40,400 in 2026).

But the relief isn't universal. The higher cap phases out for high earners — starting at $505,000 of modified AGI, it shrinks by $0.30 for every additional dollar of income, bottoming out at the old $10,000 floor once MAGI reaches roughly $606,000–$608,000.

That phase-out band sits almost exactly on top of our client profile. If your income falls between roughly $500,000 and $608,000, you're in the exact range where your SALT deduction is actively shrinking as your income rises — on top of climbing property assessments in most high-value markets.

And the higher cap itself is temporary: absent Congressional action, it reverts to $10,000 for everyone in 2030.

Why This Hits Differently at Your Level: Three Pressures Compounding at Once

The phase-out squeeze. Every additional dollar of income above $505,000 MAGI costs you thirty cents of SALT deduction — a real, dollar-for-dollar tax cost tied directly to earning more.

Rising assessments, paid regardless of realization. Unlike income tax, property tax is levied on assessed value whether or not you've sold or borrowed against the asset. As local markets appreciate, the bill rises with it — a cost you pay in cash on paper wealth.

Escalating costs at the high end. According to Ownwell, which tracks property tax data across seven states, the average annual tax bill on homes worth $1–10 million is $19,208 — more than four times the $4,254 average on homes under $1 million. Notably, the effective rate is actually lower for high-value homes (1.13% vs. 1.35%) — wealthier owners are more likely to appeal assessments and use exemptions. The dollar exposure is simply larger to begin with.

How the Burden Shifts Geographically: It Depends Where You Live, Where's The Property?

A note on legislative relief: Texas and Florida are both actively pursuing property tax relief.

Texas has already raised its homestead exemption to $140,000, and Florida is pursuing a larger push toward $250,000 and eventual elimination, pending a November 2026 ballot measure.

Worth knowing, but worth being precise about: these are homestead exemptions, capped and limited to primary residences. They don't extend to investment property, second homes, or high-value assessments well above the exemption amount — exactly the profile most of our clients hold. Legislative relief may help at the margins; it isn't a substitute for a federal strategy built around what you actually own.

What Owners Typically Do About It (and Where It Falls Short)

Most high earners rely on a few standard tactics to manage property tax exposure:

Appraisal grievances — challenging assessments that overstate a unique or high-end property's value.
Entity structuring — holding property through trusts or entities, useful for liability and state filing purposes, though it rarely reduces the underlying property tax rate itself.
Geo-arbitrage — relocating primary residence based on total tax burden (income + sales + property) rather than any single category, often favoring low- or no-income-tax states.

These are legitimate tools, and worth pursuing on their own terms. But they address the state and local side of the ledger. None of them touch the federal side — which is where meaningful, often-overlooked offsets exist.

Our Approach: A Federal Safe Harbor

We don't focus on contesting assessments or relocating households — that's a different strategy, on a different timeline, and other professionals are better positioned for that fight.

Our focus is on what's controllable at the federal level: ensuring the owners of high-value real estate aren't leaving money on the table by overpaying their federal taxes that could otherwise offset the very state and local tax pressure described above.

The federal tax code offers substantial, legitimate opportunities for real estate owners — but capturing them requires precision and a strategy tailored to each client's specific holdings and goals. In many cases, the savings available are enough to fully offset the added state and local burden, turning a policy headwind into a wash, or better.

We work alongside your existing CPA, attorney and other real estate advisors, not around them — bringing a narrow, specific expertise in federal real estate tax strategy that complements the relationship you already have.

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