What Changes on January 1, 2027 for Rental Property Investors

Federal tax: settled, and mostly in the investor's favor

Under Public Law 119-21 (July 4, 2025):

• Bonus depreciation: 100 percent bonus depreciation is permanent for qualified property acquired and placed in service after January 19, 2025, which keeps cost segregation on rentals at full value in 2027.
• Pass-through deduction: the 20 percent qualified business income deduction is permanent. The wider phase-in range ($75,000 single, $150,000 joint) and a $400 minimum deduction for active businesses apply to tax years beginning after December 31, 2025, so 2026 returns filed in 2027 are the first to use them (26 U.S.C. 199A as amended, section 70105(c)).
• Interest, 1031 and estate: the business interest limit is computed on EBITDA again for tax years beginning after December 31, 2024. 1031 exchanges are unchanged. The estate and gift exclusion is $15 million per person from 2026, indexed from 2027 (26 U.S.C. 163(j) and 2010, as amended by Public Law 119-21).
• SALT cap: $40,400 for 2026, rising 1 percent a year through 2029 before reverting to $10,000 in 2030, and reduced for modified adjusted gross income over $505,000 (the 2026 figure). Property taxes on a rental are deducted against rental income, so they fall outside the cap (26 U.S.C. 164(b)(6) and (7)).

The IRS published its tax year 2027 inflation adjustments on November 5, 2026. For 2027, the Section 179 expensing limit is $2,640,000 (up from $2,560,000), the estate tax basic exclusion is $15,480,000 (up from $15,000,000), and the standard deduction is $33,200 for joint filers and $16,600 for single filers (IRS, IR-2026-133, and Rev. Proc. 2026-35, November 5, 2026).

Information reporting: the Form 1099-NEC and 1099-MISC threshold is $2,000 for payments made in 2026, reported on the forms landlords file in January and February 2027, and indexed in $100 steps after that. The 1099-K threshold is $20,000 and more than 200 transactions (26 U.S.C. 6041 and 6050W).

None of this is tax advice. Your CPA applies it to your return.

The large-investor purchase ban, January 7, 2027

The 21st Century ROAD to Housing Act (Public Law 119-101, Section 1001, enacted July 11, 2026) bars a "large institutional investor," meaning an entity in the business of holding single-family homes that, alone or in concert with others, has investment control of 350 or more of them, from buying more single-family homes from January 7, 2027. A single-family home here has two or fewer dwelling units, so duplexes count. The exceptions:

• Build-to-rent
• Renovate-to-rent (improvements of at least 15 percent of purchase price on a code-deficient home)
• Homes built or renovated for sale
• Loss mitigation
• Purchases from another covered investor
• Purchases from an investor that is not itself covered, through January 7, 2029

The civil penalty is up to the greater of $1 million or three times the purchase price per violation. Existing holdings aren't forced out (Public Law 119-101, Section 1001; Treasury's proposed rule, 91 FR 66799, October 23, 2026; U.S. Treasury, October 22, 2026).

Treasury's first proposed rule defines build-to-rent (never owner-occupied, bought within 18 months of the certificate of occupancy, rented to individuals), renovate-to-rent (15 percent of price net of land value, with a 10 percent structural safe harbor that doesn't lower it) and passive investors. Comments are open through November 23, 2026, and Treasury calls it "the first phase" (Gibson Dunn, November 3, 2026).

If your group controls fewer than 350 single-family homes, you're generally not covered, and through January 7, 2029, a covered investor can still buy from you. The counting rules reach affiliates, funds and joint ventures, and they're still being written. If you invest through a fund or joint venture, check with counsel. For scale, owners of one to five properties hold 92 percent of investor-owned single-family homes, and owners of 1,000 or more hold 2 percent (BatchData via Inman, October 15, 2026).

Opportunity Zone 2.0, January 1, 2027

The program is now permanent. New zone designations take effect January 1, 2027 and run through December 31, 2036. The new rules apply to investments made after December 31, 2026: a rolling five-year deferral, a 10 percent basis step-up at five years (30 percent for qualified rural funds), a 10-year exclusion with a 30-year cap, and tighter tract eligibility (IRS Notice 2026-40; HCVT, June 22, 2026).

Opportunity Zone 1.0 deferred gain comes due December 31, 2026. It goes on the 2026 return whether or not the investment is sold, and it can't be deferred again (IRS Notice 2026-40, June 18, 2026; HCVT, June 22, 2026).

All 56 states and territories nominated a total of 6,576 tracts by the October 28, 2026 deadline. Treasury had certified 13 jurisdictions as of November 4, with most certifications due by November 27, 2026 (OpportunityZones.com tracker, November 4, 2026).

Old designations formally run to December 31, 2028 (Puerto Rico's to December 31, 2027), but new money generally doesn't qualify in a tract that's only on the old map. Property bought there after December 31, 2026 qualifies only under a working-capital plan adopted by December 31, 2026 or as an ordinary-course replacement (IRS Notice 2026-40, Section 5.01).

LLC reporting: no federal filing for U.S.-formed LLCs

FinCEN's final rule (91 FR 52508, effective August 14, 2026) permanently exempts U.S.-formed companies and U.S. persons from beneficial ownership information reporting. Foreign-formed entities registered in a state still report their non-U.S. owners, and FinCEN will delete previously filed U.S. data (Federal Register, August 14, 2026). State rules can differ, so check any state filing with your registered agent or attorney.

The CFPB's small business lending data rule was narrowed on May 1, 2026 to a single compliance date of January 1, 2028, so there's no January 2027 lender reporting change behind a DSCR loan (91 FR 23530). Business-purpose loans are outside Regulation Z's consumer rules regardless of size (12 CFR 1026.3(a)).

Texas: the 20 percent appraisal cap on investor property expires

Tax Code Section 23.231 limits annual appraised-value increases on non-homestead real property valued at or below $5,320,000 in 2026 (rentals and small commercial property the owner has held since at least January 1 of the prior year) to 20 percent, and subsection (k) reads "This section expires December 31, 2026." The Comptroller says the same: "The circuit breaker limitation expires Dec. 31, 2026" (Texas Tax Code 23.231; Texas Comptroller, Valuing Property).

The constitutional provision behind the cap expires the same day (Texas Constitution, Article VIII, Section 1(n-1)), so reviving it would take a new constitutional amendment, passed by two-thirds of each chamber of the 90th Legislature, which convenes January 12, 2027, and approved by voters. No extension has been enacted, and the 2025 bills to make the cap permanent (HB 1622, SB 322) never left committee (Property Tax Desk, October 2026). Expect 2027 appraisal notices on investor property to carry no 20 percent cap, and ask your property tax consultant about protests. The Texas market page has the state's lending terms.

Florida: the non-homestead cap drops from 10 to 5 percent

Amendment 3 passed on November 3, 2026 with 62 percent of the vote (4,917,829 to 3,016,210 at 99 percent of precincts, unofficial until certified), above the 60 percent needed, and the Associated Press called it (News4JAX and ClickOrlando, November 4, 2026).

• The cap: from the 2027 tax roll the annual assessment increase on non-homestead property (rentals, commercial, second homes) is capped at 5 percent for non-school levies, down from 10 percent. School levies stay on market value, as they are today (Florida Chamber of Commerce, November 4, 2026; Manatee County Property Appraiser).
• Homestead and timing: the homestead exemption from non-school levies becomes $150,000 in 2027 and $250,000 in 2028, indexed from 2029. New residents arriving after December 31, 2026 wait five years for the enhanced exemption, and the first reduced bills are the November 2027 bills (Manatee County Property Appraiser; Florida Chamber of Commerce, November 4, 2026).

The Revenue Estimating Conference puts the local revenue reduction at $4.93 billion in fiscal 2027-28 and $8.71 billion in 2028-29 (Florida Chamber of Commerce). The Governor said he will call a special session within two months to implement it and to limit local workarounds (CBS Miami, November 4, 2026).

For an investor, the 5 percent cap is the upside. The risk is how local governments set millage rates in the summer 2027 budget season.

Two more Florida changes. Since October 1, 2026, a landlord can end the tenancy of someone who got possession by fraud on a seven-day notice with no right to cure, though removal still goes through eviction (CS/HB 1293, Laws of Florida Chapter 2026-143). And from February 1, 2027, listing platforms must show estimated property taxes (HB 7031E; Florida Department of Revenue, July 13, 2026). The Florida market page has the state's lending terms.

State landlord laws in 2027

• Washington: the maximum rent increase for 2027 is 10 percent under HB 1217. The formula, 7 percent plus Seattle CPI, came to 11.53 percent, so the 10 percent ceiling applies (2026 was 9.683 percent). Landlords must give 90 days' notice and can't raise rent in a tenancy's first 12 months. Exemptions cover buildings within 12 years of first occupancy, owner-occupied duplexes, triplexes and fourplexes (not available when the owner is a REIT, a corporation or an LLC with a corporate member) and regulated affordable housing (Washington Department of Commerce, July 15, 2026; RCW 59.18.700 and 59.18.710). From January 1, 2027, a landlord using smart locks must offer a non-biometric, non-app key on request (RCW 59.18.750).
• Oregon: the 2027 maximum is 10 percent (2026: 9.5 percent), exempting buildings less than 15 years old (Oregon Department of Administrative Services, September 28, 2026; ORS 90.323).
• California: AB 1482's caps for August 1, 2026 to July 31, 2027 are 8.7 percent in Los Angeles and Orange counties, 8.2 percent in San Diego, 8.8 percent in the Bay Area, 8.1 percent in Riverside and San Bernardino and 8.6 percent elsewhere (California Today, November 2, 2026, compiling the state's figures). From January 1, 2027, the post-emergency 10 percent rent cap covers leases of any length (SB 1365), rental ads with digitally altered photos must disclose it (AB 2025) and eviction service rules tighten (AB 747). From April 1, 2027, every landlord must share a written pet policy (SB 1296).
• Illinois: for leases on or after January 1, 2027, every non-optional fee must appear on page one of the lease and in listings, eleven categories of fees are banned, and application fees are capped at $50 unless actual third-party screening cost is higher. Owner-occupied buildings of six or fewer units are exempt (HB 3564, signed June 26, 2026; Gould & Ratner, August 31, 2026).
• Colorado: rental applications must disclose the data accessed, the factors weighed and any third-party screener, and eviction filings must redact identifiers (HB26-1196). Residents may generally install portable solar devices, subject to reasonable restrictions (HB26-1007).
• Georgia: on a tenant's motion and after a hearing, a court may seal dispossessory records where the tenant prevailed, paid the judgment in full, or seven years have passed since a dismissal or a fully paid judgment (SB 406, Section 8).
• Tennessee: leases entered into, amended, extended or renewed from January 1, 2027 may not bar lawful firearm possession in the unit (Public Chapter 606).
• Utah: property management for compensation requires a license. An individual owner managing their own property is exempt, and if your rental is held in an LLC, confirm how the exemption applies (HB 377).
• District of Columbia: no separate billing of common-area or vacant-unit utilities (Law 26-156).
• Virginia, July 1, 2027: landlords with more than four rental units must give 90 days' notice of a rent increase (HB 678) and, once per term, offer a payment plan of up to six months when a tenant owes no more than one month's rent plus late charges (HB 95). Every landlord must disclose fees, deposits, screening criteria and the screening agency before taking any payment (ch. 1050, Va. Code 55.1-1203), and nonpayment notices must itemize charges (SB 294).

Insurance going into 2027

• Florida: Citizens' 2026 rates fell an average 8.8 percent for homeowners multiperil (effective July 1, 2026 and at renewal). Its policy count was 216,432 on October 30, 2026, against 1.4 million at the 2023 peak. The regulator approved four more private cuts of 3.2 to 10.4 percent in September, and the commissioner expects "more aggressive rate cuts" into 2027 (Citizens, March 4, 2026, and policies in force, October 30, 2026; Florida Realtors, September 24, 2026; Insurance Journal, September 23, 2026).
• California: the FAIR Plan's 29.1 percent average dwelling increase took effect October 15, 2026, with 698,307 policies in force at September 2026 (PNG Insurance, October 1, 2026; California FAIR Plan key statistics). A new insurance commissioner replaces the current one after the November 3, 2026 election (CalMatters, November 4, 2026).
• Texas: the windstorm pool filed for no rate change for 2027 (Texas Windstorm Insurance Association, August 4, 2026).

Landlord and short-term rental premiums vary by property and carrier, so get a quote on the property before you set your budget.

What didn't change

• Short-term rental rules stay state and local. There's no federal short-term rental law
• 1031 exchanges: Public Law 119-21 left them intact
• Business-purpose DSCR loans stay outside the federal consumer mortgage rules
• Massachusetts: the 2026 rent control initiative was removed from the ballot by the Supreme Judicial Court on June 23, 2026
• Florida and Arizona still preempt local short-term rental bans

Our lending terms don't change on a calendar date either. Pinnacle Funding Network DSCR loans qualify on the property's rental income, up to 80 percent on purchases and rate-and-term refinances. Cash-out runs to 75 percent as standard and up to 80 percent on select programs, except in the states where the programs cap it at 75 percent. The credit floor is 660 for most programs, loans run from $55,000 to $5 million and closings take 20 to 30 days. The 2027 rate outlook puts the published starting rates next to the market.

The calendar, date by date

Effective dates as published by November 4, 2026. The short-term rental rules are covered in detail on the short-term rental outlook. This calendar isn't legal or tax advice.

The rest of the 2027 outlook

• DSCR and fix and flip rates in 2027What the forecasters expect, and what moves the rate.
• Best markets for real estate investors in 2027Where capital is going, where flips paid and where rents grew, with 37 metros side by side.
• Fix and flip in 2027Margins, money, materials and the exit.
• Short-term rental and Airbnb financing in 2027Demand, rules and how the loan qualifies.

To run the numbers on your own properties, use the 2027 year-end planner. A 2027 purchase or refinance starts with the DSCR loan program.