Bloomberg: Homeowners in High-Tax States Race to Beat Property Tax Cap

Homeowners in states with the highest property taxes are looking to prepay 2018 bills ahead of a $10,000 cap on the deduction for state and local levies, including property taxes, in the GOP tax overhaul President Donald Trump just signed.

In New York, residents are peppering local officials with questions about how to prepay their 2018 property tax bills in the current year in the hope of deducting them from 2017 taxes, the New York Times reports.

In New Jersey, state Senate President Stephen Sweeney has asked Republican Governor Chris Christie to make it easier for residents to pay their entire 2018 property-tax bill by December 31. Jersey City Mayor Steve Fulop, a Democrat, also wants his community across the Hudson River from New York to allow homeowners to prepay their entire 2018 bills rather than just two quarters, according to the Star-Ledger of Newark.

“The additional tax savings we can provide New Jerseyans by maximizing the deductibility of property tax prepayments does not take away from the unfairness of the red-state tax bill that sharply curtails the deductibility of state and local income taxes that has been a staple of the federal tax code since the enactment of the income tax in 1913,” Sweeney, a Democrat, said in a statement.

The tax law, enacted just before Christmas, has prompted some local governments to revise their rules in a bid to facilitate the last-minute change in federal tax strategies. The Montgomery County Council in Maryland broke its winter recess to pass a bill allowing residents to prepay 2018 taxes, the Washington Post reported.

In Washington D.C., Democratic Mayor Muriel Bowser’s office put out a guide to early prepayments for city residents. Zillow puts the median currently listed home price at $550,000 in the nation’s capital, meaning many of the city’s itemizing homeowners will be affected by the cap. Bowser, in a statement, vowed to use “every tool in our toolbox to protect Washingtonians from the negative impacts” of the new law.

Source: Bloomberg

Image Courtesy: Bloomberg