The federal property tax exemption elevated once more for 2026. But, the upper, IRS-inflation-adjusted quantity might not come as a shock to most who’ve been watching the information.
Enacted on July 4, 2025, the Trump/GOP spending invoice, typically known as the “large stunning invoice” (BBB), completely prolonged a number of non permanent federal tax provisions. Amongst these adjustments is a rise within the property exemption quantity to the next base threshold.
And with subsequent yr’s greater exemption quantity, heirs might obtain a probably decrease federal tax invoice. However there could also be a rise in taxes for some high-income earners.
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This is extra of what you’ll want to know.
Property tax exemption 2026
The federal property tax doesn’t apply until you hit a sure exemption quantity. Due to the BBB, the exemption stays excessive, and the IRS has elevated the exemption to the quantities beneath for 2026:
- The exemption quantity for individuals who move away in 2026 is $15 million (up from $13.99 million for the 2025 tax yr).
- Married {couples} can count on their exemption to be $30 million (up from the present $27.98 million for 2025 taxes).
Federal property tax charges
As a result of greater 2026 exemption quantity, solely a sure proportion of estates might be topic to the federal property tax.
Nonetheless, estates valued over the tax quantity might be taxed at a fairly hefty fee, with these exceeding greater than $1 million ($16,000,000 or $31,000,000 mixed for married {couples}) taxed at 40%.
Beneath is how a lot heirs can count on to pay based mostly on an property’s worth:
Swipe to scroll horizontally2026 Property Tax Charges For Quantities Over Exemption
Charge
Taxable Quantity (Worth of Property Exceeding Exemption)
18%
$0 to $10,000
20%
$10,001 to $20,000
22%
$20,001 to $40,000
24%
$40,001 to $60,000
26%
$60,001 to $80,000
28%
$80,001 to $100,000
30%
$100,001 to $150,000
32%
$150,001 to $250,000
34%
$250,001 to $500,000
37%
$500,001 to $750,000
39%
$750,001 to $1 million
40%
Greater than $1 million
The property tax exemption can be listed for inflation.
Swipe to scroll horizontallyFederal Property Tax Exemption Quantities 2019-2026
Interval
Exemption Quantity
2019
$11,400,000
2020
$11,580,000
2021
$11,700,000
2022
$12,060,000
2023
$12,920,000
2024
$13,610,000
2025
$13,990,000
2026
$15,000,000
State property tax charges
Some states might impose an property tax of their very own (and the exemption quantities aren’t at all times as beneficiant because the federal property tax exemption).
As an illustration, in Massachusetts, the state property tax exemption is simply $2 million and isn’t listed for inflation.
A number of states additionally impose an inheritance tax, which might go away a tax invoice to your heirs on even small quantities of cash.
Nebraska, for instance, imposes an inheritance tax on grownup kids when their inheritances exceed $100,000. In Kentucky, nephews and nieces solely obtain a $1,000 exemption.
Particular person AMT phaseout threshold lowers in 2026: Will you need to pay AMT?
Earlier than the Tax Cuts and Jobs Act (TCJA), 5.2 million Individuals paid the Different Minimal Tax (AMT), per Tax Coverage Heart knowledge. This “parallel tax system” was carried out to make sure that higher-income taxpayers pay a minimal quantity of tax.
Nonetheless, by means of the TCJA, the person AMT threshold was raised in a few methods:
- Growing the exemption quantity from $84,500 to $137,000 for married submitting joint {couples} (single filers from $54,300 to $88,100).
- Elevating the phase-out threshold from $160,900 to $1,252,700 for married submitting joint {couples} (single filers from $120,700 to $626,350).
The consequence was that the variety of taxpayers who paid AMT dropped from about 5 million to simply 200,000 in 2018, based on the Tax Coverage Heart. Below the BBB, the person AMT exemption quantities have been made everlasting.
However beginning in 2026, the phaseout might be lowered to $500,000 for singles and $1 million for married {couples} submitting collectively. As soon as extra, the phaseout fee for each greenback above this threshold was elevated from 25% to 50%.
This implies extra earnings from greater earners might be topic to AMT subsequent yr.
So even when you have not paid AMT in recent times, you might begin paying this various tax in 2026 for those who’re a high-income earner.
