BiggerPockets Daily Why Staying In Your Quickly Appreciating Home Doesn’t Make Sense
Apr 4, 2025
Explore the rising burden of capital gains taxes on homeowners, particularly in fast-appreciating markets. Learn about the challenges of selling properties with significant equity and strategies to mitigate tax liabilities. Discover the use of irrevocable trusts in real estate management, and hear personal stories that highlight varying attitudes toward property management across generations. The discussion weaves together financial strategies and the complexities of navigating the real estate landscape.
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Capital Gains Tax Implications
- Homeowners staying in rapidly appreciating homes face a larger capital gains tax hit.
- Frequently moving to pricier homes can minimize this tax burden upon downsizing.
Outdated Capital Gains Relief
- The capital gains tax relief limits haven't been adjusted for inflation since 1997.
- In 2023, 8% of home sales exceeded these limits, highlighting the need for an update.
Increase in Home Sales Exceeding Limits
- Between 2000 and 2003, only 1.3% of existing home sales exceeded the capital gains exemption limit.
- In 2022, this number skyrocketed to over 300,000 home sales, a significant increase.