The good news for some homeowners in one town: The average assessed value of a house in your neighborhood has skyrocketed by more than eightfold, climbing from about $212,000 to $1.8 million.
Now for the bad news: Your property taxes are going up as well, to just over $29,000 from an average of about $16,500 — and you'll only be able to deduct the first $10,000 on your taxes.
That's the situation facing some homeowners in Jersey City, New Jersey, as the rapidly gentrifying city performs its first round of reassessments since 1988.
The traditionally blue collar town, which sits directly across the Hudson River from New York City, is an extreme example, but it isn't alone.
Property taxes, for instance, are up 38 percent year-over-year in Clark County, Nevada – home to Las Vegas – raising the average 2017 tax bill on a single family home to $2,445 from $1,774, according to ATTOM Data Solutions, a provider of real estate data.
Home prices there have risen by 100 percent over the last five years, according to ATTOM.
Meanwhile, homeowners in Williamson County, Texas — just outside of Austin — experienced a 15 percent tax increase last year. Owners of single family homes paid an average of $6,697 in property taxes, up from $5,837, according to ATTOM.
Over the last five years, home prices there have risen by 80 percent.
"The story is that people are moving to these markets, and they're experiencing rapid home price appreciation," said Daren Blomquist, senior vice president at ATTOM.
"It doesn't just affect the people who are willing to pay for the homes and the property taxes," he said. "There is a ripple effect on neighbors who might have been there for 20 years, and their taxes go up as well."
Here's how to contend with skyrocketing property taxes.
For Keren Vered, a Jersey City resident, community activist and fashion industry consultant, the $18,000 tax hike on her townhouse translates to an additional outlay of about $1,500 a month.
That's on top of the $10,000 she already paid annually in property taxes prior to the city's reassessment. Then there are other regular monthly costs she'll need to weigh.
"For me, it's not just the $1,500 a month, but the private school part of it, too," said the mother of two, ages 2 and 4. "Year over year, plus private school, I worry about the long-term sustainability of it."
The family has a lever available to help contend with the tax increase: They already rent out one floor of their three-story townhouse. Even so, tenants can only handle so much of an increase in their rent.
"I'm trying to get the city to where other families like mine would want it to be," said Vered. "Rents going up create a barrier to entry."
Homeowners like Vered face an additional difficulty: Prior to 2018, they were able to claim all of their property tax liability if they itemized on their taxes.
With the Tax Cuts and Jobs Act now in place, residents can now only claim up to $10,000 in state and local tax deductions.
Residents in New York, New Jersey and California are among the hardest hit.
Plus, fewer filers are expected to itemize in 2018 because the new tax law has doubled the standard deduction to $24,000 for a married couple filing jointly. Under the previous law, about 49 million taxpayers — roughly 3 in 10 individuals — filed itemized returns, according to the Urban-Brookings Tax Policy Center.
Accountants point to a couple of strategies homeowners facing big tax hikes can take.
An entrepreneur working from home can take a home office deduction in one of two ways. First, there's the "safe harbor" method in which you deduct $5 per square foot for an office that's up to 300 square feet.
You can also calculate your deduction based on your actual expenses, figuring out the percentage of your home used for the business.
This method considers the percentage of home costs, including real estate taxes, attributable to the office, according to S. Andrew Smith, a CPA and principal at Baker Newman Noyes in Portland, Maine.
The "actual expense" method also deducts for depreciation, and you will pay taxes on that when you sell your home, Smith warned.
You do not need to itemize on your taxes to grab the home office deduction, but you do need to show a profit from a home business in order to take it.
Whether you have a duplex or a spare room, consider taking on a tenant.
"You'll pay the property tax one way or the other, but at least you have some rental income to help pay for it," said Tim Steffen, director of advanced planning for R.W. Baird's private wealth management group in Milwaukee.
If you rent out your home, be sure to track your expenses and talk to your insurance agent. "If you use it as a rental property, even partially, your insurance coverage needs will change," said Smith.
On the other hand, if your rapidly appreciating property is in a prime destination, consider that you won't have to claim the rental income if you rent your space for less than 14 days over the year.
Finally, if you disagree with your municipality's assessment on your home, you can contest the findings.
Get to know your city's appeal's process, which can be deadline sensitive and will vary from one town to the next.
Expect to gather evidence of your home's market value, too.
You can hire an appraiser to provide your city's tax assessor with reports and comparable property values to back up your findings, said Brigid D'Souza, a CPA and founder of Civic Parent, a website that follows property tax developments in Jersey City.
The national average cost of hiring an appraiser is about $329, according to HomeAdvisor, a home improvement website.
You can also hire an attorney on a contingency basis to represent you through the appeals process, which typically costs one-third to one-half of your first year's tax savings, D'Souza said.
While a licensed realtor can't give you an appraisal, he or she can provide you with comparative sales which can act as evidence of market value, said D'Souza.
"Comparables are best if you can say that this home is assessed at what yours should be, and you have similar square footage and features," said Steffen. "But be careful: They could raise your neighbor's taxes."