New Rules for Real Estate- 2026

[Starting March 1, 2026]:

The Residential Real Estate Rule requires certain professionals involved in real estate closings and settlements to submit reports to FinCEN regarding certain non-financed transfers of residential real estate to legal entities or trusts.

Significant civil and criminal penalties for failure to report, with potential fines up to $5,000 per violation

• New Jersey "Mansion Tax" Changes (FY 2026 Budget): The 1% "mansion tax" on properties over $1 million is now shifted from buyer to seller, with a new, higher, graduated fee schedule up to 3.5% for transactions over $3.5 million.

• New York All-Electric Requirement: As of January 1, 2026, most new construction projects seven stories or shorter must be all-electric.

• New York Institutional Investor "90-Day Rule": Entities owning 10+ homes ($30M+ in assets) are prohibited from bidding on 1- or 2-family homes until they have been listed for 90 days.

• EBITDA Business Interest Deduction: For tax years after Dec. 31, 2024, the business interest deduction is calculated using EBITDA, generally allowing higher deductions for real estate businesses.

  
  

• 100% Bonus Depreciation: The OBBBA permanently restores 100% bonus depreciation for eligible business property placed in service after January 19, 2025, providing a major tax benefit for real estate investors.

  
  

• Opportunity Zones: The Qualified Opportunity Zone (QOZ) program is extended and improved, with the OBBBA making features like "qualified rural opportunity funds" more attractive.

• California: AI Photo Disclosures: Effective January 1, 2026, agents must disclose if property photos have been digitally altered or AI-generated.

  
  

• California: Transit-Oriented Zoning: New laws limit local restrictions on high-density housing within a half-mile of major transit stops. 

• 2021 IECC Compliance: HUD and USDA requirements for new homes to meet the 2021 International Energy Conservation Code take effect in May 2026, potentially increasing construction costs

  
  

• Stay NJ Program: A major property tax relief program for seniors (cutting taxes by up to 50%) begins quarterly benefit payments in January 2026.

• Florida: Permit Exemptions: Effective July 1, 2026, local governments are prohibited from requiring a building permit for residential work valued at less than$7,500(excluding electrical, plumbing, or structural work).

• Texas: Eviction Process (SB 38): The eviction process is streamlined, with court trials set between 10 and 21 days after filing, targeting faster removal of squatters.

• Illinois: Summary of Rights for Safer Homes Act: Landlords must include a four-page document summarizing tenant rights under various state laws as the first part of any new or renewal lease, requiring signatures on all four pages. Failure to comply can lead to damages of up to $2,000.

• Illinois: Eviction Act Changes: Eviction lawsuits that name a minor will be dismissed statewide.

• Illinois: Safe Homes Act Protections: Tenants facing imminent threats of domestic or sexual violence can terminate leases early without penalty.