By Howard Morrel & Leslie Hirsch
As we approach 2026, several significant federal and state tax changes are set to reshape the planning landscape for high-net-worth individuals, families, and fiduciaries. For those who own real estate personally, through trusts, estates, or entities, these changes underscore the importance of thoughtful, coordinated planning that looks beyond any single asset in isolation.
At Christie’s International Real Estate Group’s Trusts & Estates Division, we work closely with attorneys, tax advisors, fiduciaries, and families to understand how real estate fits into the larger picture of wealth preservation, succession planning, liquidity needs, and legacy goals. Below is a high-level overview of what is changing and why it matters for real estate owners.
What’s Changing in 2026: Key Highlights
The One Big Beautiful Bill Act (OBBBA)
Beginning January 1, 2026, the OBBBA permanently sets the federal estate, gift, and generation-skipping transfer (GST) tax exemptions at $15 million per individual. This creates new planning flexibility for families considering lifetime gifting, trust structuring, and intergenerational transfers of valuable assets, including real estate.
Charitable Deduction Changes
Charitable deductions for taxpayers who itemize will be subject to a new floor. For individuals who use real estate donations, conservation easements, or charitable trusts as part of their planning, this change may affect timing, structure, and overall tax efficiency.
Expanded QSBS Benefits
The Qualified Small Business Stock (QSBS) exclusion has been increased and expanded, making QSBS investments more attractive in several ways. While not directly tied to real estate, this change may influence broader asset allocation decisions and liquidity planning, which in turn can impact how and when property is sold, retained, or transferred.
SALT Deduction Cap Increase
The state and local tax (SALT) deduction cap will be temporarily increased to $40,000 through 2029 for some taxpayers. This may modestly alter the after-tax cost of owning high-value property in high-tax jurisdictions and could influence holding structures or residency considerations.
529 Plan Enhancements
Rules governing 529 plans have been modified, expanding qualifying tax-free distributions and increasing tuition payment limits. For families balancing education planning alongside property ownership and estate planning, this offers additional flexibility in how capital is allocated.
Important State-Level Changes
Connecticut
Connecticut’s estate and gift tax exemption will rise to $15 million, aligning it with the new federal exemption. This harmonization may simplify planning for Connecticut-based families and trusts holding real estate.
New York
New York’s estate tax exemption will increase to $7,350,000, which remains significantly lower than the federal exemption and continues to warrant careful planning for New York property owners.
Additionally, New York will introduce new LLC transparency requirements effective January 1, 2026. These rules may affect entity-owned real estate, privacy considerations, compliance obligations, and long-term holding structures.
Why This Matters for Real Estate Planning
Real estate is often one of the largest and least liquid components of an estate. Changes to exemptions, deductions, and entity regulations can materially affect:
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Whether a property should be held, sold, or transferred during life
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How and when liquidity should be created to satisfy estate taxes or equalize inheritances
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The optimal ownership structure (individual, trust, LLC, or combination)
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Coordination between real estate sales and broader financial, charitable, and family goals
Planning in silos can lead to missed opportunities or unintended consequences. Real estate decisions made without regard to tax, trust, and succession planning can create friction later for executors, trustees, and beneficiaries.
Our Holistic Approach at Christie’s Trusts & Estates Division
Our Trusts & Estates Division was created specifically to address this complexity. We take a holistic view of our clients’ wealth and legacy, understanding that real estate does not exist in a vacuum. We work collaboratively with a client’s existing advisory team to help ensure that real estate strategy aligns with:
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Estate and trust planning objectives
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Tax and liquidity considerations
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Charitable and philanthropic goals
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Family dynamics and succession plans
Whether advising on the timing of a sale, preparing estate-owned property for market, coordinating multi-jurisdictional assets, or supporting fiduciaries through complex decisions, our role is to bring clarity, structure, and market expertise to a process that is often both financial and deeply personal.
Planning Ahead
With meaningful changes taking effect in 2026, now is the time for property owners, trustees, and executors to review existing structures and assumptions. Early, coordinated planning can help preserve value, reduce friction, and create better outcomes for families and beneficiaries.
If you are involved in estate planning, trust administration, or advising clients with significant real estate holdings, we welcome the opportunity to be a resource and thought partner.
Important Disclaimer
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex and subject to change. You should always consult with your tax advisor, attorney, or other qualified professional regarding your specific circumstances.
All the best,
Howard Morrel & Leslie Hirsch
Co-Founders, Trusts and Estates Division
Christie’s International Real Estate Group
(212) 956-4823
mha@christiesrealestategroup.com
About the Authors
Howard Morrel and Leslie Hirsch are co-founders of the Trusts and Estates Division at Christie’s International Real Estate Group. With over 20 years of experience in high-value real estate transactions, they specialize in guiding executors, trustees, and families through the unique complexities of estate-related property sales in New York City.