Introduction
If you are preparing to sell property or grow your portfolio in 2026, mastering the most effective real estate tax tips is essential. With the sweeping changes in tax legislation and inflation adjustments taking effect next year, both sellers and investors must act strategically. In this blog, you will learn about the major tax shifts coming in 2026, deductions and strategies you can use now, and how to structure your ownership for the best results.
Major Tax Law Shifts Affecting Real Estate
One of the most important real estate tax tips for 2026 revolves around the new legislation under the One Big Beautiful Bill Act (OBBBA). This law makes permanent many of the tax cuts from the past and introduces adjustments that directly affect property transactions and ownership.
For example:
- Income tax rates that were scheduled to rise revert to the previous levels, thanks to OBBBA.
- The deduction cap for state and local taxes (SALT) has increased for tax year 2025-29, which impacts real-estate owners in high-tax states.
- Bonus depreciation of 100% on qualified property has been restored and made permanent, which is great news for property investors.
These are key real estate tax tips to factor into your 2026 planning.
Deductible Expenses, Depreciation & Investment Opportunities
Another set of high-value real estate tax tips for investors centers on deductions and depreciation. With 100% bonus depreciation back, improvements to property placed into service after January 19, 2025, qualify for immediate expensing.
Also, the guidance around rental property owners and commercial investors has been clarified for 2026:
- The 20% qualified business income (QBI) deduction remains available for rental pass-throughs and REIT dividends.
- For affordable housing projects, the low-income housing tax credit (LIHTC) allocation was increased starting in 2026, a useful point if you invest in that sector.
For sellers, keeping very clear records of improvements, capital expenditures, and basis adjustments will help you reduce taxable gain when you sell. These are all actionable real estate tax tips for the upcoming year.
Capital Gains, Sale Timing & Ownership Structure
When planning to sell property in 2026, key real estate tax tips include understanding how your sale timing and entity structure impact gain treatment.
- Tax brackets for 2026 have been adjusted for inflation, which affects how capital gains will be taxed.
- For investors using entity-structures (LLCs, S-corps, partnerships), evaluate how your holding entity qualifies for QBI and how you treat rental activity (active vs. passive).
- Ownership structure matters: treating your investment as a trade or business may yield more favourable tax treatment, and structuring correctly ahead of sale is important.
Sellers can also look at techniques like deferred sales, 1031 exchanges (where applicable), and timing improvements to align with tax-year cut-offs. These are strategic real estate tax tips that pay off in 2026.
Takeaway Checklist for 2026 Real Estate Moves
Here is a quick checklist of real estate tax tips to apply as you prepare for 2026:
- Review acquisition and improvement dates: are you eligible for bonus depreciation or other accelerated deductions?
- Check your ownership entity: does it maximise deductions, QBI eligibility and liability protection?
- When planning a sale: model the capital gain, factor in adjusted tax brackets, consider sale timing and whether a like-kind exchange applies.
- Keep detailed records of all property costs, improvements, and holding periods to support basis and deduction claims.
- Stay aware of state and local tax changes (e.g., SALT cap increases) that affect your total tax burden.
By integrating these real estate tax tips into your strategy now, you’ll be better positioned for smoother transactions, higher after-tax returns, and fewer surprises. Whether you’re selling a property or growing your portfolio, the tax environment for real estate in 2026 is complex, but with the right plan, you can gain a competitive edge. Contact your tax professionals today to see how this affects you and your real estate transactions.
