US Map Shows Where Millions Could Pay Higher Taxes When Selling Home
Summary
A report by the National Association of Realtors shows that millions of U.S. homeowners face higher taxes when selling their homes because the federal capital gains tax limits have not increased since 1997. As home prices have grown significantly, many sellers could owe more taxes, which may discourage them from selling and reduce the number of homes available on the market.Key Facts
- The federal capital gains tax exclusion for selling a main home is $250,000 for single people and $500,000 for married couples, unchanged since 1997.
- Home prices have increased over three times since 1997, from $129,000 to about $419,300 nationally.
- About 25.4 million homeowners have gains over $250,000, and roughly 8 million have gains over $500,000 from home sales.
- Around 13.1 million homeowners (15% of all owner-occupied homes) have gains that exceed the current tax exclusion limits.
- Homeowners in expensive states like Hawaii (51.3%) and California (43.6%) are most affected by these limits.
- Large states like Texas, Florida, and New York also have many homeowners with big gains due to their size and price growth.
- Some Midwest and Southern states like Mississippi, Iowa, and Louisiana have fewer homeowners exceeding these tax limits, despite recent price rises.
- If home prices rise 10% to 30% in the future, an even larger share of homeowners across all states will face higher capital gains taxes.
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