Should You Use a QPRT for Rental Properties?
Jan. 7, 2026
Thinking about the future of your property can stir up mixed emotions. You may feel proud of the real estate you’ve acquired, yet uneasy about taxes, family expectations, or what will happen to those assets later on. If you own rental property, those concerns can feel even heavier.
You might wonder whether there’s a way to pass property on efficiently without giving up control too soon or triggering unnecessary tax consequences. These questions are common, and you’re not alone in asking them.
Taking the time to explore your options now can help you feel more confident about what comes next, so reaching out for guidance from an experienced estate planning lawyer sooner rather than later can make a meaningful difference. For property owners in Boca Raton, Florida, questions about estate planning tools often lead to conversations with Eric H. Light, P.A.
Many clients ask whether a Qualified Personal Residence Trust, or QPRT, can be used for rental properties. While QPRTs can offer tax advantages in certain situations, they aren’t designed for every type of real estate. Reach out to Eric H. Light, P.A., to speak with a knowledgeable legal professional in Boca Raton who can help you decide whether a QPRT fits your goals.
What a QPRT Is and How It Works
A Qualified Personal Residence Trust is an estate planning tool allowed under federal tax law. It lets you transfer a personal residence into an irrevocable trust while keeping the right to live in that home for a set number of years.
When that period ends, ownership passes to your chosen beneficiaries, often with reduced gift and estate tax consequences. The idea behind a QPRT is relatively straightforward.
You give away the future interest in your home while holding on to the right to live there during the trust term. Because that retained right has value, the taxable value of the gift is discounted. If the property increases in value over time, that appreciation generally passes to your beneficiaries rather than remaining part of your taxable estate.
For a QPRT to work as intended, you must outlive the trust term. If you pass away before the term ends, the property is typically brought back into your estate, and the tax benefit disappears. This makes careful planning and realistic expectations essential.
Most importantly for rental property owners, QPRTs are meant for personal residences—not investment properties. That distinction plays a significant role in whether this tool can be used at all.
Why Rental Properties Often Don’t Qualify
If you own rental property, you may be hoping that working with Eric H. Light, P.A., on a QPRT can reduce future taxes while still allowing you to benefit from the property today. Unfortunately, federal rules place strict limits on how a property in a QPRT may be used, and those limits often conflict with rental activity.
A property placed in a QPRT must qualify as a personal residence. That requirement creates several practical barriers for rental owners. Eligibility rules that affect rental properties include:
Primary or secondary residence requirement: The property must be used as your main home or a qualifying second home.
Limited rental use: Long-term or regular rental activity generally disqualifies the property.
No ongoing income production: Collecting consistent rental income during the trust term can violate QPRT rules.
Actual personal use: You must truly occupy and use the property, not simply designate it as a residence on paper.
If your property is leased to tenants for most or all of the year, it likely won’t meet these requirements. Even short-term rentals or seasonal use can create issues if income production becomes more than incidental.
When a QPRT Might Make Sense
Although QPRTs are rarely suitable for rental properties, there are limited situations where they may still be an option. This typically happens when you plan to change how the property is used.
For example, if you intend to convert a rental property into your primary residence or a true vacation home—and keep it that way for the entire trust term—a QPRT may be possible. In those cases, the property must stop functioning as an income-producing asset.
When the conditions are right, a QPRT may offer several potential advantages. Possible benefits in the right circumstances include:
Lower gift tax value: The future transfer of the property may be discounted for tax purposes.
Continued personal use: You retain the right to live in the home during the trust term.
Transfer of appreciation: Any increase in value after the trust is created may pass to your beneficiaries.
Predictable succession: The property’s future ownership is clearly defined in advance.
These benefits can be appealing, especially if you’re already planning to use the property as part of your long-term living arrangements. Still, they come with trade-offs. Once the trust term ends, the property belongs to your beneficiaries, and they usually must pay fair market rent to stay there.
Drawbacks and Alternative Planning Strategies
Even when a QPRT is technically allowed, it isn’t always practical. Giving up ownership at a fixed point in the future can feel uncomfortable, and the rules leave little room for change if your circumstances shift. Common concerns to think about include:
Irrevocability: Once established, the trust generally can’t be changed.
Strict compliance rules: Renting the property during the trust term can undo the benefits.
Mortality risk: Passing away before the trust term ends defeats the tax planning goal.
Capital gains exposure: Beneficiaries may not receive a step-up in tax basis.
Ongoing expenses: You remain responsible for taxes, insurance, and upkeep.
Many rental property owners choose other estate planning strategies that allow continued income while addressing long-term goals. Alternatives such as other trust structures, lifetime gifting plans, or coordinated tax strategies may provide more flexibility.
Speak With a Trusted Estate Planning Lawyer in Boca Raton
If you’re wondering whether a QPRT is right for your rental property, you’re asking an important question. For most rental owners, a QPRT won’t be the best fit, but for a smaller group with changing plans, it may still be worth exploring. The key is making that decision with a full picture of the risks, limits, and alternatives.
If you're a property owner in Boca Raton, Florida, turn to Eric H. Light, P.A., for thoughtful estate planning guidance tied to real estate and long-term goals. By taking the time to evaluate your situation carefully, Attorney Eric H. Light helps you move forward with confidence rather than uncertainty.