Tax overhaul leads to end-of-year rush to pay property bills

CHERRY HILL, N.J. — In a season of sales, homeowners in affluent towns across the country are rushing to take advantage of a deal that they hope will save them big. On taxes. Tax collectors in many communities are seeing a surge in property tax prepayments before 2018 in an effort to cash in — for one last year — on a deduction that the coming tax overhaul will limit.

The tax office at the Cherry Hill Township building in New Jersey saw a steady stream of property owners on Friday.

One man said his buddies at an early-morning hockey game said it would be a good idea to prepay. A couple was there because their accountant called to recommend it. And Ron Brand — an accountant, though he doesn’t do other people’s taxes — was there with $15,000 to pay a full year’s worth of 2018 property taxes.

“I’m hoping to get a 22 percent return on my money,” he said, calculating that every dollar he could deduct from his income this year would mean 22 cents less in federal taxes.

Since a national income tax began more than 100 years ago, people have been allowed to deduct from their income the amount they’ve paid for state and local taxes.

But under the tax legislation President Donald Trump signed into law Friday, there’s a $10,000 cap on the deductions.

That’s going to hit hard in states such as California, Connecticut, New York and New Jersey — states where the average state and local deductions in 2015 all topped $17,000.