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Florida voters approved a constitutional amendment on November 3, 2026, that will hike the state's homestead exemption. The measure is estimated to reduce property tax revenue by billions of dollars annually. Local governments, police associations, and firefighter associations had warned the proposal would eliminate billions of dollars used to fund public safety and other core services.
Florida Governor Ron DeSantis said Wednesday that he will call a special legislative session for lawmakers to implement the homestead exemption hike approved by voters Tuesday. The measure is expected to significantly reduce local property tax revenues, according to reporting dated November 4, 2026.
Local governments, police associations, and firefighter associations warned before the vote that the Florida proposal would eliminate billions of dollars used to fund public safety and other core services. Reporting dated November 4, 2026 noted there is now a waiting period to see how local governments respond when they put their budgets together next year.
North Carolina will amend its constitution to allow the state to impose restrictions on the ability of local governments to raise property tax rates, according to preliminary results of a Tuesday vote reported on November 3, 2026. Boulder, Colorado voters also approved a ballot measure subjecting vacant residential properties to an excise tax starting at $4,000 annually.
Vacant residential properties in Boulder, Colorado, will be subject to an excise tax starting at $4,000 annually under a ballot measure the city said was approved by voters, according to reporting dated November 5, 2026. The source does not specify an effective date beyond the ballot approval.
The U.S. Treasury Department designated 6,567 qualified opportunity zones in the second iteration of the program. These designations are effective as of January 1 and will run through December 31, 2036. The new map is smaller than the first iteration, which had 8,764 qualified opportunity zones.
Opportunity zones 2.0 tightened the income eligibility threshold to 70% of area median income from 80%. In April, Treasury and the IRS released a list of 25,332 eligible census tracts and said states could nominate no more than 25% of their eligible tracts.
Of the 6,567 tracts in the newly designated opportunity zone map, 2,594 are in rural areas, according to Treasury. The new iteration of the program also provides greater benefits for investment in rural areas.
Under the One Big Beautiful Bill Act passed last year, the opportunity zone program became a permanent fixture in the tax code. Governors are required to pick new census tracts every 10 years. Starting July 1, governors and the mayor of D.C. were tasked with proposing which tracts in their states and territories would become opportunity zones.
Peakline Real Estate Funds launched its fourth opportunity zone fund, targeting up to $1.3B in equity and more than $3B in total investment with debt. The fund will pursue urban multifamily, mixed-use and industrial projects alongside rural housing and infrastructure.
James Landor will lead JTC's outreach to 1031 exchange clients across the eastern United States, working from JTC's Boston office. His title is Senior Manager, Institutional Capital Services. Landor will help real estate investors, advisors, and intermediaries understand and use JTC's Qualified Intermediary services, according to JTC.
JTC acts as a Qualified Intermediary, the third party that receives sales proceeds from the relinquished property sale and holds them until they are used to acquire the replacement property. JTC also offers an Exchange Manager portal with 24/7 access for real-time status updates, and has expertise in forward and reverse exchanges as well as those involving foreign property, according to JTC.
JTC's 1031 team has expertise in exchanges involving foreign property, according to JTC. James Landor's experience across multiple offshore jurisdictions is intended to help clients whose personal and business interests extend beyond national boundaries navigate Section 1031 for foreign residents and those who own foreign property, according to JTC.
JTC works with Delaware Statutory Trusts to help investors exchange into passive investment vehicles that provide access to institutional-quality commercial real estate, according to JTC. JTC lists DSTs alongside 1031 Exchange and EB-5 as part of its Specialty Financial Administration offerings in the United States.
The Internal Revenue Service proposed rules on September 10, 2026, requiring opportunity funds to file information returns. According to Law360 Tax Authority, the rules implement new statutory requirements and are designed to improve the IRS's ability to administer and enforce the federal opportunity zone program's tax benefits.
The IRS said the proposed information-return requirements are intended to improve the agency's ability to administer and enforce the federal opportunity zone program's tax benefits, according to Law360 Tax Authority. The rules implement new statutory requirements placed on opportunity funds.
According to Law360 Tax Authority, the proposed rules apply to opportunity funds, which would be required to file information returns under the new statutory requirements proposed by the Internal Revenue Service on September 10, 2026.
As of September 10, 2026, the requirements remain proposed rules. The Internal Revenue Service proposed the rules on that date, according to Law360 Tax Authority, and they had not been finalized based on the source text.
According to the source, an investor has 45 calendar days from the sale closing to identify replacement properties in writing, with no extensions. The investor must then close on the replacement property within 180 days of the sale or by the tax return due date including extensions, whichever comes first. Both periods run simultaneously from the same start date.
According to the source, a qualified intermediary cannot be someone who has acted as the investor's agent within the past two years, which explicitly includes an attorney, accountant, real estate agent, or employee, with some limited exceptions. The source recommends choosing an established intermediary and asking how client funds are held and protected.
According to the source, the IRS requires investors to meet one of three tests: the three-property rule allows identification of up to three properties of any value; the 200 percent rule allows any number of properties as long as total value does not exceed 200 percent of the sold property's value; and the 95 percent rule allows any number but requires purchasing at least 95 percent of the total identified value.
According to the source, boot is anything received in the exchange that is not like-kind property. Common forms include cash taken out of the exchange, a reduction in debt not offset by new debt or added cash, and personal property or other non-qualifying items. Some closing costs such as commissions and title fees can be paid from exchange funds without creating boot, while prorated rents, security deposits, and loan fees may create boot if handled incorrectly.
According to the source, the taxpayer who sells the old property must be the same taxpayer who buys the new one. If an LLC sells, that LLC generally must buy. A single-member LLC that is ignored for tax purposes is usually treated as the same taxpayer as its owner, but changing ownership structure in the middle of an exchange is described as risky, and the source advises planning structure changes well before or well after the exchange.
Yes. Under 26 U.S.C. § 1400Z-2(a)(1), gain from selling any property to an unrelated person — including appreciated stock or a business — can be deferred by investing it in a Qualified Opportunity Fund within the 180-day period beginning on the sale date. A 1031 exchange, by contrast, covers only real property held for business use or investment.
The One, Big, Beautiful Bill Act (OBBBA, Public Law 119-21, signed July 4, 2025) rewrote the Qualified Opportunity Zone rules and extended the program past its original 2026 cutoff by allowing deferral elections after December 31, 2026. New zone designations also take effect January 1, 2027, according to Notice 2026-40.
Holding a QOF interest for at least 10 years allows an investor to elect a basis equal to the asset's sale price, making any growth inside the fund potentially free of federal capital gains tax, according to the Internal Revenue Code. Notice 2026-55 notes this rule now has a 30-year limit. A five-year hold earns a 10% basis boost, or 30% for a qualified rural opportunity fund.
No. A QOF investor only has to invest the gain itself — the original capital can be returned to the investor. A 1031 exchange generally requires reinvesting the full sale proceeds to defer the entire gain, according to the article's side-by-side comparison.
The rules are still being written. Notice 2026-40 announced upcoming proposed regulations, and Notice 2026-55 asks for public comments by November 23, 2026. Proposed regulations published September 11, 2026 under REG-116506-25 would require QOFs to file annual information returns on Form 8996 and send statements to investors who sell.
Treasury proposed an 18-month grace period after the January 7, 2027 effective date during which large investors may still purchase newly constructed, purpose-built rental homes that have not been previously owner-occupied. Developers who complete such properties within that window but hold them beyond it would be unable to place them with large investors unless another exemption applies. Treasury solicited feedback on whether 18 months is sufficient.
According to Scotsman Guide's reporting on the ROAD Act, investors who own 350 or more single-family homes cannot purchase additional properties under the legislation. The bill also drew scrutiny toward build-to-rent, rent-to-own, and rehabilitate-to-rent investor activities.
Treasury's proposed rules maintain a rehabilitate-to-rent exemption only for institutional investors who make renovations and improvements totaling at least 15% of the purchase price. Treasury described this threshold as a barrier to investors claiming rehabilitation exceptions on the basis of merely cosmetic upgrades.
Under Treasury's proposed rules, violations of the various single-family purchase restrictions by large investors could trigger a civil penalty of up to $1 million or three times the property's purchase price. Treasury said additional rulemaking would follow to implement other aspects of the investor restrictions.
The 21st Century ROAD to Housing Act takes effect on January 7, 2027. Treasury published its first proposed rule on October 26, 2026 and requested public comment submissions by November 23, 2026, according to Scotsman Guide's reporting by Ryan Kingsley.
The U.S. Tax Court limited the deductions that Sysco Corp. can take on repatriated income. The court held that Sysco failed to distinguish its case from Varian Medical Systems Inc.'s earlier failed bid for identical deductions, applying the Varian precedent against Sysco. The ruling was issued on September 14, 2026, according to Law360 Tax Authority.
Sysco Corp. lost deductions on repatriated income, according to Law360 Tax Authority. The U.S. Tax Court ruled on September 14, 2026 that these deductions were identical to those previously denied to Varian Medical Systems Inc., and that Sysco failed to distinguish its case from the earlier Varian ruling.
Washington, D.C., legislation before the district council would impose additional property tax on homes worth about $2.6 million or more that are not rented out or used as primary residences. The tax targets high-value second homes or vacant properties that fall above that valuation threshold and are not generating rental income.
The Washington, D.C., legislation sets the threshold at homes worth about $2.6 million or more. Properties below that value would not be subject to the additional levy under the proposal currently before the district council.
No. According to Law360 Tax Authority, the Washington, D.C., legislation would impose the additional property tax only on homes that are not rented out and are not used as primary residences. Properties that are actively rented out would not be subject to the additional levy.
As of the September 23, 2026 Law360 Tax Authority report, the proposal is legislation before the district council and has not been described as enacted. The source does not indicate the bill has passed or been signed into law.
Tim Steffen, managing director and director of advanced planning at Baird Private Wealth Management, said properly structured 351 deals remain viable. Mohsen Ghazi, a partner at Ashurst Perkins Coie, said the Treasury is not looking to kill the strategy altogether, describing the ruling as drawing a line between legitimate tax planning and strategies that manufacture tax outcomes.
Rev. Rul. 2026-20 targets deals in which investors seed a new ETF with appreciated securities that do not fit the fund's strategy. The ETF issues shares to an authorized participant for securities that do fit, then quickly redeems those shares in kind using the investors' original holdings. The IRS treats the ETF as a conduit and recharacterizes the arrangement as a taxable exchange.
Law firm Ropes & Gray noted the ruling carries no effective date, suggesting the IRS sees it as existing law that can reach completed transactions. Mohsen Ghazi of Ashurst Perkins Coie said advisors should not assume a completed transaction is automatically invalid but should review how the transaction was structured and what tax analysis supported it.
Tim Steffen of Baird Private Wealth Management said the most common misconception involves a single concentrated holding, with clients believing they can trade one appreciated stock for an ETF. Steffen clarified that the strategy requires a portfolio of diversified stocks. He also noted many clients misread the strategy as tax elimination rather than tax deferral.
More than 100 ETFs have been seeded in-kind under Section 351 since 2021, representing more than $40 billion in AUM, according to a tracker maintained by Tax Alpha Insider. Mohsen Ghazi of Ashurst Perkins Coie said the Treasury could issue regulations, additional rulings, designate certain strategies as reportable transactions, or challenge arrangements retroactively or prospectively.
The Ninth Circuit held that a long gap between transferring property and receiving replacement property did not, by itself, prevent Section 1031 tax nonrecognition treatment. The court affirmed the district court in part and reversed it in part, ruling against T.J. Starker on the Timian and Bi-Mart properties and on the characterization of the 6% growth factor as interest.
The IRS assessed a deficiency of $300,939.31 plus interest against T.J. Starker and a deficiency of $35,248.41 against Bruce and Elizabeth Starker. Bruce and Elizabeth won their refund case, and the government voluntarily dismissed its appeal against them. The dispute involving T.J. Starker continued to the Ninth Circuit.
In 1967, the Starkers transferred their interests in 1,843 acres of timberland in Columbia County, Oregon to Crown Zellerbach Corporation. Crown credited $1,502,500 for T.J. Starker and $73,000 for Bruce and Elizabeth Starker, and had up to five years to acquire and transfer replacement real estate in Oregon and Washington selected by the Starkers, with a 6% annual growth factor added to the outstanding balance.
The Ninth Circuit ruled against T.J. Starker on the Timian and Bi-Mart properties because Crown Zellerbach transferred those properties directly to his daughters rather than to him.
The Ninth Circuit's 1979 ruling in T.J. Starker v. United States became known for establishing that a delay between the transfer of original property and the receipt of replacement property did not, by itself, disqualify a transaction from Section 1031 tax nonrecognition treatment, countering the IRS argument that both transfers had to occur simultaneously.
The Maryland tax court struck down the digital advertising tax because it violates the federal Internet Tax Freedom Act by applying only to electronic commerce, according to Law360. The court issued a group of decisions on Friday reaching that conclusion.
Yes. According to Law360, Maryland's digital advertising tax was described as the first-in-the-nation such tax, making Maryland the only state to have enacted this type of levy before it was struck down by the state's tax court.
According to Law360, the Maryland tax court found that the digital advertising tax violated the federal Internet Tax Freedom Act. The court's reasoning centered on the tax targeting only electronic commerce.
According to Law360, the Maryland tax court issued its group of decisions striking down the digital advertising tax on Friday, August 14, 2026.
The IRS announced Wednesday it has formed a dedicated office to resolve disputes over charitable deductions for conservation and historic preservation easements. The agency said the office centralizes expertise to address the hundreds of such cases that have long overwhelmed existing capacity. No additional structural or staffing details were disclosed.
Investment volume in U.S. commercial real estate grew nearly 20% annually in the first quarter, according to a Cozen O'Connor report. The report found the gains were uneven, driven largely by a recovery in the office and hotel sectors, while upheaval from the Iran conflict and other factors remain headwinds.
The Eighth Circuit decided Wednesday to affirm a more than $1 billion class action settlement resolving antitrust claims against the National Association of Realtors and multiple real estate brokerages. The brokerages had been accused of running an anticompetitive scheme involving NAR rules that artificially inflated buyer-broker commissions.
Machine Investment Group LP capped its second fund targeting distressed real estate opportunities at $350 million, the firm announced Wednesday. Machine Investment Group LP was advised by Kirkland & Ellis LLP.
Equity Residential agreed to sell off two high-rise apartment buildings in Boston to avoid state and federal antitrust claims following its $69 billion merger with AvalonBay Communities, according to an agreement with the Massachusetts attorney general.
The new Opportunity Zone designations take effect January 1, 2027 and remain in place for 10 years, according to the source text. Governors face a September 28 deadline to submit nominations, with a 30-day extension available upon request, and Treasury will certify the final designations.
Roughly 6,500 zones could be selected nationwide under the new maps, according to Bisnow on September 15. That would be nearly 26 percent fewer than the 8,764 zones designated under the original program, due to tighter eligibility rules.
While the original program attracted significant multifamily investment, developers are now pursuing designations for a broader range of real estate projects, including mall redevelopments and data centers, according to Bisnow on September 15.
Sen. Hawley (R-MO) introduced the No Tax Breaks for Data Centers Act, which would exclude data centers from OZ tax benefits while preserving the incentive for other eligible investments, according to a September 17 press release. A separate House Democratic proposal, the Reverse Big Ugly Tax Breaks for Data Centers Act, would also deny covered data centers both OZ eligibility and 100% bonus depreciation.
The Real Estate Roundtable's Opportunity Zone Working Group urged Treasury and the IRS to adopt clear, workable rules allowing existing projects to continue through the transition to the permanent program. In July 29 comments, RER sought clearer rules for multiphase projects, property improvements, and continued investment in original OZ tracts through their statutory expiration in 2028.
According to AP, the surcharge applies to one-, two- and three-family homes valued above $5 million, as well as condos and co-ops valued at $1 million or more, in each case only when the property is not used as the owner's primary residence.
New York City's luxury second-home surcharge is expected to raise about $500 million annually, according to AP.
Steve Wynn and Wilbur Ross argue the levy is unconstitutional because it discriminates against people who do not primarily live in New York State, according to AP.
Casino mogul Steve Wynn and former Trump administration secretary Wilbur Ross sued New York State over the luxury second-home surcharge, according to AP.
The U.S. Tax Court issued a decision endorsing the use of the income approach to value a Los Angeles-area donated property in a conservation easement case. According to a September 10, 2026 report, the IRS has historically been adversarial toward taxpayers using this method, and the Tax Court's ruling significantly reinforced the income approach's legitimacy.
According to a September 10, 2026 report, the IRS has been adversarial toward taxpayers using the income approach to value conservation easements. The U.S. Tax Court's recent endorsement of the method in a Los Angeles-area donated property case significantly reinforced its legitimacy despite that IRS resistance.
An Alabama real estate developer told the U.S. Tax Court on September 3, 2026 that the IRS was wrong to disallow two conservation easement deductions worth a combined $78 million. The developer argued the IRS based its disallowance on potential mining activity without adequately explaining why.
According to a September 10, 2026 report, the U.S. Tax Court decision that endorsed the income approach to valuing conservation easements involved a donated property located in the Los Angeles area.
New York City's Industrial Development Agency deferred a vote on the property-tax incentive at its September 15, 2026 meeting. The EDC stated that projects often need more review time and said it looks forward to presenting the project at a future meeting. The agency's next scheduled meeting is November 17.
The IDA's analysis puts the incentive's price tag at $92.2 million in tax benefits for 99 Hudson Boulevard. In return, the IDA's analysis forecasts almost $860 million in combined direct and indirect tax revenues from the project.
Tishman Speyer's application describes a $2.7 billion project at 99 Hudson Boulevard slated to start construction in January. The tower would be 48 stories and 1.3 million square feet, becoming Tishman Speyer's second high-rise in Hudson Yards on Manhattan's Far West Side.
Tishman Speyer estimates roughly 2,385 full-time construction positions during the build phase of 99 Hudson Boulevard. After construction, Tishman Speyer estimates over 1,780 office and building service positions at the tower.
If the subsidy moves forward, it could put the mayor at odds with progressive supporters who argue tax breaks for developers shortchange public services and housing, according to the source text. Mamdani's office did not respond to a request for comment, and a Tishman spokesperson also declined to comment.
According to the Reuters commentary, prohibited service revenue is deemed at least 150% of the REIT's direct cost of providing the service. If that deemed income exceeds 1% of gross income, qualifying rent treatment for the entire property — not just the service revenue — can be jeopardized.
The Reuters commentary states that when impermissible tenant service income exceeds 1% of a property's gross income, the consequence is not limited to the service revenue itself — the entire property's qualifying rent treatment is at risk of disqualification.
According to the Reuters commentary, prohibited tenant service income is deemed to equal at least 150% of the REIT's direct cost of providing the service, regardless of what the REIT actually charges the tenant.
The Reuters commentary says the customary-services rules are relevant to private real-estate investors because they highlight tax-sensitive structuring issues for real-estate vehicles, particularly for those evaluating REIT compliance, data-center platforms, and service-heavy property operations.
The U.S. Commodity Futures Trading Commission announced on September 14, 2026 that it has handed out more than $150 million to whistleblowers over the past two months. The CFTC's general counsel described this as a record year for awarding tipsters.
The CFTC's general counsel said the agency is having a 'record year' for awarding tipsters, according to the agency's September 14, 2026 announcement, which also confirmed more than $150 million in whistleblower awards over the prior two months.
Senator Ron Wyden's white paper proposes a new federal 'Data Center Public Investment excise tax' at a rate in the low single-digits on data center development. Wyden also calls for repealing existing tax breaks that 40 states currently provide to data center developers, many of which come in the form of sales tax exemptions on servers and equipment.
Wyden said approximately $700 billion in data centers are currently under development nationwide. Wyden also said data center construction has quadrupled nationwide over four years, and McKinsey estimates the AI industry will pour $7 trillion into infrastructure by 2030.
The libertarian Cato Institute argued the proposed tax could drive data center tax rates over 100% and that taxing revenue rather than business activities could penalize the least profitable data centers. Cato's analysis said such a tax could end new data center development and risk stripping the U.S. of its status as the global leader in AI and cloud-based technologies.
Ohio has paused tax incentives for data center facilities after realizing the state is losing billions in foregone taxes, according to the source text.
The IRS disallowed the two conservation easement deductions based on potential mining activity, according to court filings reported by Law360. The Alabama developer argued the IRS failed to adequately explain why potential mining activity was sufficient grounds to reject the combined $78 million in deductions.
Court documents associated with the dispute include two petitions identified as Petition (Hollow Oak) and Petition (Singh Moore), according to Law360. The two easements together represent a combined $78 million in disallowed deductions.
The Alabama developer told the court the IRS was wrong to disallow the two conservation easement deductions without adequately explaining why potential mining activity justified the disallowance, according to Law360's September 3, 2026 report.
The two conservation easement deductions at issue have a combined value of $78 million, according to Law360. The IRS disallowed both deductions, and the Alabama real estate developer is seeking to have them restored through a legal challenge.
Each 1031 exchange carries the original cost basis forward into the replacement property, deferring gain rather than erasing it. If the owner holds the final property until death, Internal Revenue Code Section 1014 gives heirs a stepped-up basis equal to fair market value on the date of death, permanently eliminating all deferred gain from every prior exchange for income tax purposes, according to the source.
The replacement property must be formally identified within 45 calendar days of closing the sale of the relinquished property, and the purchase of the replacement must close within 180 calendar days of that same original sale closing. Both clocks run concurrently, include weekends and holidays, and missing either deadline collapses the exchange and makes the full accumulated gain taxable, according to the source.
An ordinary cash sale triggers all accumulated deferred gains in a single tax year. On the source's example of a $2 million property with a basis tied to a 1994 purchase, selling rather than exchanging exposes up to $1.85 million in gain to a 20% federal capital gains rate, a 3.8% net investment income tax, and a 25% unrecaptured depreciation recapture tax, according to the source.
Yes. Unrecaptured Section 1250 gain, which represents depreciation recapture and is taxed at a federal rate of up to 25% on an ordinary sale, is deferred through each 1031 exchange along with the capital gain. The stepped-up basis under Section 1014 wipes both the deferred capital gain and the depreciation recapture away at death, according to the source.
Since the Tax Cuts and Jobs Act took effect on January 1, 2018, only real property qualifies for 1031 exchanges. Both the relinquished and replacement properties must be held for investment or business use. A primary residence does not qualify, nor does a property bought primarily to resell. Exchanges of equipment, artwork, or vehicles are no longer permitted, according to the source.
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