Real estate in another state: whose estate tax applies in 2026
Real estate is taxed where it sits. A house in Oregon, Massachusetts or Pennsylvania can bring a state death tax to an estate whose owner lived in a state that has none. Enter both states and the values to see what each one claims.
- Florida estate, Oregon house
- $117,188
- Same house in Pennsylvania, 2 children
- $67,500
- Same house in New York
- $0
- States that tax at death
- 17
Tax owed to Oregon on the property
$117,188
A nonresident estate return is due in that state.
| Oregon estate tax | $117,188 |
| Oregon inheritance tax, each heir | $0 |
| Florida estate tax | $0 |
| Federal estate tax | $0 |
Holding the property in a revocable trust avoids a second probate; it does not by itself avoid the state tax.
Compiled by Radif Partners · How we calculate · figures read on the state revenue department, the statute and irs.gov · not legal or tax advice
When someone dies owning real estate outside the state where they lived, the state where the property sits keeps the right to tax it. Every estate-tax jurisdiction and every inheritance-tax state reaches a nonresident's real estate and tangible property located within its borders, while bank accounts and securities follow the owner's domicile. The method differs. Oregon, Washington, Minnesota, Illinois and most others compute their tax on the whole estate as if everything were local, then keep the fraction that their property represents. New York and Massachusetts tax only the local property, with the local exclusion applied to it. A Florida resident with a net estate of $4,000,000 that includes a $1,500,000 house owes $117,188 to Oregon if the house is there, $37,500 to Washington, nothing to New York or Massachusetts, and $67,500 of Pennsylvania inheritance tax if two children inherit it there. The federal exclusion of $15,000,000 leaves this estate with no federal tax.
Same estate, same house, eleven different answers
The table follows one estate: a Florida resident, $4,000,000 of net assets, of which a $1,500,000 house in another state, left in equal shares to two heirs. Florida has no estate or inheritance tax, so the only state that can claim something is the one where the house stands. The second column shows the bill when the heirs are the owner's children, the third when they are nephews or nieces, because inheritance taxes depend on the relationship.
| House located in | Method | Heirs: 2 children | Heirs: 2 nephews |
|---|---|---|---|
| Oregon | Estate tax on the whole estate, times the local share | $117,188 | $117,188 |
| Washington | Estate tax on the whole estate, times the local share | $37,500 | $37,500 |
| Minnesota | Estate tax on the whole estate, times the local share | $48,750 | $48,750 |
| Illinois | Estate tax on the whole estate, times the local share | $0 | $0 |
| Massachusetts | Estate tax on the local property only | $0 | $0 |
| New York | Estate tax on the local property only | $0 | $0 |
| Pennsylvania | Inheritance tax on each share of the house | $67,500 | $225,000 |
| New Jersey | Inheritance tax on each share of the house | $0 | $234,750 |
| Maryland | Estate tax on the whole estate, times the local share | $0 | $150,000 |
| Nebraska | Inheritance tax on each share of the house | $13,000 | $156,200 |
| Kentucky | Inheritance tax on each share of the house | $0 | $0 |
The differences are large for a single property. Oregon taxes estates from $1,000,000, so it computes $312,500 on the full $4,000,000 and keeps 37.5 % of it, the house's share of the gross estate. Massachusetts and New York reach the same house but tax it alone, and $1,500,000 is under both of their thresholds. Kentucky moved nephews and nieces into its exempt Class A for deaths from 2026, which is why its column shows nothing in either case.
The ratio method: tax the whole, keep a fraction
Most estate-tax states treat a nonresident's estate as if all of it were theirs, run their table, then multiply by a fraction. The Washington Department of Revenue spells it out: the tax computed on the entire estate is multiplied by the Washington property over the gross estate, and for an owner domiciled elsewhere, intangible property counts as out of state. Oregon writes the same thing on lines 6 to 8 of the OR-706 instructions, and the Minnesota statute applies the same fraction. The consequence is that the owner's wealth elsewhere raises the bill: the larger the estate, the higher the rate applied to the local share, and an estate under the state's threshold owes nothing even if the house is valuable.
Try your own pair of states
Tax owed to Washington on the property
$130,000
| Washington estate tax | $130,000 |
| Washington inheritance tax, each heir | $0 |
| Texas estate tax | $0 |
| Federal estate tax | $0 |
New York and Massachusetts: the property alone
New York's Tax Law section 960 taxes a nonresident on real and tangible property with a New York situs and leaves intangible property out of the computation. Massachusetts does the same since August 1, 2025: its estate tax guide starts from the federal gross estate, removes everything but Massachusetts real and tangible property, subtracts the deductions related to it, then applies Table B and the $99,600 credit. A modest house therefore owes nothing, but a large one is taxed in full. A Florida resident with $8,000,000 of Manhattan real estate in a $12,000,000 estate is past the New York cliff on the property alone and owes $773,200. The filing test still looks at the whole estate, so a return can be due even when the tax is zero.
The other direction: residents with property elsewhere
A resident of an estate-tax state usually escapes its tax on real estate located in another state. For a Massachusetts resident the out-of-state real and tangible property is simply removed from the amount subject to tax. With a $1,000,000 Florida condo in a $4,000,000 estate, the Massachusetts tax is $82,400, against $180,800 if the same money sat in Massachusetts. Ratio states reach the same result by leaving the outside property out of the numerator. The property is not untaxed for all that: it falls under the rules of the state where it sits, which in this example is Florida, with no tax.
Inheritance tax on a nonresident's property
Pennsylvania, New Jersey, Kentucky, Nebraska and Maryland also tax a nonresident's real estate and tangible property located there. Pennsylvania computes the tax on the value of that property, net of the mortgage and unpaid property taxes, at the beneficiary's rate: 4.5 % for a child, 12 % for a brother or sister, 15 % for a niece or nephew (Pennsylvania inheritance tax). New Jersey taxes the share of a remote heir as if the whole estate were in New Jersey, then keeps the New Jersey fraction. Kentucky prorates each heir's exemption by the share of the estate it taxes, as its Department of Revenue explains. A spouse pays none in any of them, and children pay none in New Jersey, Kentucky and Maryland.
Ancillary probate is a separate question
A second state's tax and a second court proceeding often travel together, but they are not the same thing. Real estate titled in the deceased's own name usually has to pass through a probate proceeding in the state where it lies, called ancillary probate, before the heirs can sell it. Holding the property in a revocable trust or in joint ownership with a survivorship right changes how title passes; it does not change which state taxes the property, because estate and inheritance taxes reach trust property and jointly held property included in the estate. Estate attorneys in each state handle both questions, and the forms are listed on the page of each state, such as Oregon, Washington or Massachusetts.
Two values to have before any estimate
The first is the value of the property on the date of death, the figure every state starts from; a recent sale price or assessment is a rough proxy, an appraisal is what the return uses. The second is the size of the whole estate, because ratio states use it both to pick the rate and to compute the share, and because New York and Massachusetts use it for the filing test. Debts secured by the property reduce what the state taxes. The calculator at the top of this page takes both values and shows the tax of the state where the property lies, the tax of the home state if it has one, and the federal estate tax.