Many landlords don’t even pay taxes on the money they DO make.
They can depreciate a property to offset their income, even though the property is going up in value. The catch is that they have to pay taxes on more of the money they get from selling the property. But if they don’t sell, potentially no taxes for decades. And if they leave it to their kids in their will, no taxes there either and the kid’s cost basis in the property is the market value at the time they received it. So they can start the depreciation all over again.
This is how my non-expert self understands it anyway. It’s part of what draws some people into real estate.