Unpacking claim new federal law prevents children from inheriting parents' houses

In June 2025, a claim circulated online that from January 2026, a new federal law will prohibit children in the U.S. from inheriting their deceased parents' houses. 

The rumor spread primarily in the form of TikTok videos, where one user's post had amassed more than 126,000 likes and 3.6 million views as of this writing.

Text over the footage read: "You won't be allowed to keep your parents' house after they pass away. Starting Junuary 2026." Snopes readers also searched the website for information on whether "kids can't inherit their parents' home" from that date onward. 

However, there was no indication that a federal law banning children from inheriting their parents' homes passed in the United States. As the videos largely used the same script, this was likely a form of copypasta, or an internet hoax shared using copy-and-paste. Thus, we have rated this claim as false. 

One law that passed in 2017 and exempts heirs from paying taxes on inherited properties up to a certain limit, however, does expire in January 2026. If lawmakers don't extend the exemption, only extremely wealthy families would see an impact — and that does not mean the government would unilaterally seize these families' homes. 

Breaking down unfounded 'evidence'  

Examining the script of the video with more than 3.6 million views revealed immediate red flags regarding the veracity of the claim. For example, the footage begins by referencing a "new federal law" and citing a "March 2025 report": 

You won't be allowed to keep your parents' house after they pass away. Starting in 2026, a new federal inheritance regulation will give the government the right to seize real estate assets if certain conditions aren't met. According to a March 2025 report from the U.S. Treasury Department, heirs who cannot immediately pay property transfer taxes and meet updated ownership compliance rules may lose legal rights to inherited homes. 

However, a Google search for "2026 federal inheritance regulation" returned no results from reputable news outlets about inheritance property seizures. If a law prohibiting children from keeping their parents' homes did pass, it would be eminently newsworthy. 

Federal law already gives the government the right to seize real estate assets to "satisfy a tax debt." However, officials do not consider seizures for taxpayers who "will full pay their liability within a reasonable time frame," per Internal Revenue Service (IRS) policy (see 5.10.1.4 (10-26-2022)).

The IRS must also consider "alternative methods of collection," send proper notice ahead of time and give people the chance to appeal, meaning the IRS cannot immediately seize property and it must go through proper channels before a seizure (see 5.10.1.5.2 (05-20-2016), "Alternative Methods of Collection"). Even after a property seizure, the tax agency must release property back to its initial owner for various reasons, including if the owner pays the amount owed. 

In response to an emailed inquiry as to whether any federal laws on property seizures are changing, the IRS sent links to these three documents on federal estate tax rules, expiring tax provisions and number of property seizures (see Page 61). None of these documents indicated that federal law on property seizures was changing. The first document, "Instructions for Form 706," noted that the heir of an estate has nine months within the original owner's death to pay estate taxes, but that they may also request an extension (see "Paying the Tax"). 

"I'm not aware of anything in the Federal tax law that would prohibit children from inheriting from an estate," said Anthony Burke, a spokesperson with the IRS. 

Furthermore, an alleged March 2025 report from the U.S. Treasury Department regarding legal rights to inherited homes does not appear to exist based on a Google search and several searches of Treasury's news releases. The department did not immediately return an inquiry as to whether the Treasury released such a report.

The video then goes on to name the purported law in question: 

The law is part of the National Housing Reform Act, and aims to increase housing availability by reclaiming underused or unpaid properties. In practice, this means that if your parents pass away, and you can't afford the new fees — or don't move into the home quickly enough — the state can legally take the house and list it for public sale. 

But a Google search for the "National Housing Reform Act" returned no results, indicating that the purported act was either fabricated or referred to by the wrong name. A "National Housing Act" does exist but it is from 1934 and did not handle inheritance issues. A national "Federal Housing Finance Reform Act" from 2007 also failed to become law. 

Estate tax exemption ends January 2026 

Some Snopes readers also searched the website for information on inheritance taxes or property laws changing in 2026.

It is true that a provision under the 2017 Tax Cuts and Jobs Act (TCJA) that impacts gift and estate taxes — or taxes that apply to transfers of money, property and other assets — may expire at the end of 2025 (see Page 38 of the law for the expiration date). Under the TCJA, the amount of property value that people could transfer, tax-free, doubled from $5.5 million in 2017 to $11.2 million in 2018. 

The estate tax goes up to 40% of an estate's value — although, on average, taxable estates only pay about 16.8% of their value in taxes, according to the progressive Center on Budget and Policy Priorities (see Figure 2, "average effective tax rate").

Furthermore, the vast majority of estates will not be taxed because they simply are not worth enough. In 2016, before the TCJA even increased the ceiling on taxing estates, only 0.2% of estates were taxable, according to the Congressional Budget Office. 

If lawmakers do not change the law, the amount of property value transferable to an heir, tax-free, will return to pre-2018 levels, adjusted for inflation. However, a Senate Finance Committee proposal announced June 16, 2025, under the budget reconciliation bill — also known as U.S. President Donald Trump's Big, Beautiful Bill Act — would increase the exemption minimum to $15 million and make that permanent (see Page 12). 

In sum, there is no new federal law banning children from inheriting their parents' property in 2026. An estate tax — which will impact only the wealthiest families — may increase starting that year, but lawmakers may also pass a law preventing that from happening.