Capital gains questions grow for home sellers
Rising values may leave some longtime owners with taxable gains, making early conversations about timing, records and next steps more important.
For some Florida homeowners, the question is not just whether they can sell for a strong price. It is what that sale could mean at tax time.
A new National Association of Realtors® report found that 17.9% of Florida owner-occupied households are currently estimated to have home sale gains above the federal capital gains exclusion thresholds. That is higher than the national rate of 15%.
The current exclusion allows single filers to exclude up to $250,000 in capital gains from the sale of a primary residence, while married couples filing jointly can exclude up to $500,000, if they meet ownership and occupancy rules. Those limits have not changed since 1997, even as home values have climbed.
NAR’s report says Florida’s exposure could grow if overall home values continue to rise:
- With a 10% home price increase, 23.1% of Florida owner-occupied households would be above the thresholds.
- With a 20% increase, that share rises to 28.3%.
- With a 30% increase, it reaches 34.3%.
That does not mean every seller will owe taxes. The tax is based on gain, not sale price, and homeowners may be able to factor in the original purchase price, qualifying improvements and certain selling costs.
But it does mean longtime owners, empty nesters, single filers and homeowners who bought before major price gains may need to think about the issue earlier.
NAR is backing the More Homes on the Market Act, which would double the current exclusion and index it to inflation.
READ NAR’s CAPITAL GAINS ONE-PAGER
For now, the best listing-prep move is simple: encourage sellers to gather purchase records, closing documents and improvement receipts, then speak with a tax professional before setting a sale timeline.
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