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I am not too upset about this part. I am not sure I understand the thinking of allowing a max 500K of gains to go untaxed, especially for those who are doing it every 2 years. If you are fixing it up, keep your receipts for improvements to add to the home's basis. Taxing the actual gain seems fair. It's not like people can't still move, they will just have to pay taxes on the gain.
They may renovate these homes in certain communities but it also drives up the cost of real estate and removes a viable property from prospective buyers.
Right, the flippers aren't helping anyone except themselves. Leave the house on the market for someone that will buy it, and keep it. I don't need a house with a golden toilet installed by a flipper just to try and raise the price of the house by 5k. They can kiss my rear.
Every 2 years like clockwork is not the norm for most people I would assume. But some people sell a home after owning if less than 5 years. Especially younger people because they are upsizing homes and they are also moving up in their careers and might relocate for a job to get a promotion. Young people get married and have kids at a quick pace and both are big reasons to sell a home (to buy a different home).
Keep in mind that half of marriages end in divorce. Home sales often occur due to divorces. This could occur suddenly and the couple might have own the home for 3.5 years and need to sell.
People also sell their house when they lose their job. Could be 4 years into owning your home and you lose your job. So you might sell because you want to move to a different city that has better job opportunities, or sell the house because the only reason you owned it was to be near the job (that you no longer have).
I bet most people reading this have either sold a home or condo after owning it less than 5 years, or knows someone that has done so.
I don't know it there are statistics but selling a home in 2 years is a losing proposition for the most part, almost no one does that unless there is a rare situation.. Moving from a high cost area to a new location maybe but that is a big hit. Moving to a new home in 2 years has to be a very low percentage unless you are an investor.
This is HUGE and will have a negative impact on the Real Estate market.
People will be forced to stay in their homes longer to avoid paying cap gains taxes. This will result in fewer homes sales and can impact home sales volumes, which impacts the home building industry and the real estate industry.
People that move sooner than 5 of past 8 years will have to pay taxes on the capital gain. The end result of this is a TAX INCREASE.
Unless they buy a new house of equal value. The old rollover law isn’t dead.
Prices should go higher since less people will be selling. When the supply goes down, prices go up.
But, if the people waiting for the five years all start selling their homes at the same time, there could be a glut of homes on the market three to five years after the plan is adopted.
Unless they buy a new house of equal value. The old rollover law isn’t dead.
The old rollover law IS dead for primary residences and has been gone for at least 15 years. There is something called a 1031 exchange (for investment property) but primary residences are excluded.
I don't know it there are statistics but selling a home in 2 years is a losing proposition for the most part, almost no one does that unless there is a rare situation.. Moving from a high cost area to a new location maybe but that is a big hit. Moving to a new home in 2 years has to be a very low percentage unless you are an investor.
How about selling a home in 3, 4, or 4.5 years? These moves are very common for regular non-investors. People decide to move for various reasons. The new law impacts anyone that lived in/owed their home for less than 5 years.
How about selling a home in 3, 4, or 4.5 years? These moves are very common for regular non-investors. People decide to move for various reasons. The new law impacts anyone that lived in/owed their home for less than 5 years.
Average time in a home is 13 years for move up buyers and 11 years for first time buyers.
source: NAHB
Another rip off tax and part of the GOP shell game. Get rid of the capital gains tax, its the peoples money, the state did nothing to earn it.
reduce the size of govt. and govt. spending. move ALL govt. employees off federal pensions and onto 401k's.
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