For homeowners in higher-tax states, the State and Local Tax (SALT) deduction has long played a meaningful role in reducing federal tax liability. It allows eligible taxpayers to deduct certain state and local taxes — including property taxes — from their federal taxable income.
Recent changes to SALT limits have reopened opportunities for homeowners, but they’ve also increased the importance of one often-overlooked factor: your property’s assessed value.
Understanding how SALT works — and how your property taxes fit into the equation — can make a real difference in what you ultimately pay.
What Changed With the SALT Deduction
Under the 2017 Tax Cuts and Jobs Act, the SALT deduction was capped at $10,000, regardless of how much a homeowner actually paid in property, income, or other state and local taxes.
This disproportionately affected homeowners in high-tax states such as New York, New Jersey, California, and parts of Texas, where property taxes alone can exceed that cap.
In 2025, Congress passed legislation increasing the SALT cap to $40,000 for tax years 2025 through 2029, with a phase-out beginning for individuals earning more than $500,000.
For many homeowners, this change meaningfully lowers federal taxable income — but only if the underlying taxes being deducted are accurate.
Why Property Assessments Matter More Than Ever
The SALT deduction is based on what you actually pay in property taxes, which in turn is driven by your assessed value, not your home’s market value.
That distinction is critical.
If your home is over-assessed, you may be paying more in property taxes than similar homes in your area. While a higher tax bill technically increases your SALT deduction, it doesn’t mean you’re coming out ahead.
A Simple Example:
- Your home is assessed 10% higher than comparable properties
- You pay thousands more in property taxes than you should
- Your federal deduction increases — but only because your taxes were inflated
In other words, you’re still overpaying. The deduction softens the blow, but it doesn’t fix the problem.
Correcting an inflated assessment reduces your local tax burden and ensures the SALT deduction reflects a fair, defensible value.
Where SALT Has the Biggest Impact
Homeowners see the greatest SALT impact in states with:
- Higher effective property tax rates
- Above-average home values
- Significant local government funding through property taxes
These include parts of:
- California
- New York
- New Jersey
- Illinois
- Texas
- Connecticut
- Massachusetts
In these markets, even modest assessment errors can materially affect both local and federal tax outcomes.
How INTELLI Helps Homeowners Protect Their Savings
INTELLI helps ensure your property assessment is fair, accurate, and defensible — so you’re not paying more than your share.
Our process includes:
- Reviewing your assessed value against local comparable sales
- Identifying inconsistencies, overvaluations, or data errors
- Building data-driven, defensible valuation arguments
- Managing the entire appeal process on your behalf
We work exclusively on a contingency basis, meaning we only get paid if we successfully reduce your taxable value. Our incentives are directly aligned with yours.
By correcting inflated assessments, homeowners can:
- Lower annual property taxes
- Maximize the practical benefit of the expanded SALT deduction
- Avoid compounding overpayments year after year
The Bottom Line
The expanded SALT deduction presents a meaningful opportunity — but only for homeowners who stay proactive.
An inflated assessment doesn’t just increase your local tax bill. It quietly erodes the value of federal deductions and compounds over time.
Making sure your assessment reflects your home’s true value is one of the most effective ways to protect your wallet — and INTELLI is built to help you do exactly that.
If you’re unsure whether your assessment is fair, now is the time to review it.