The More Homes on the Market Act
Although the wheels turn slowly on Capitol Hill, bipartisan legislation has been introduced that may be something we can all agree on: the “More Homes on the Market Act.”
Past Legislation Regarding Capital Gains
In 1997, legislation pertaining to tax code was passed which allowed capital gains of a maximum of $250,000 for an individual, or $500,000 for a married coupleselling a primary residence to be a non-taxable event. Unfortunately, the legislation was flawed because it was not indexed for inflation.
Current Capital Gain Situation
Fast forward 26 years, and most people who have owned their homes for a lengthy period have seen appreciation far exceed the maximum allowable gain, which means the excess could be taxed anywhere between 15%-20%. For many, the solution to not giving a large chunk of change to the IRS is to simply stay put, which of course is not helpful as it relates to lack of inventory. Empty nesters who would normally be selling and downsizing are not putting their homes on the market. That is where the “More Homes on the Market Act” comes into play.
New Legislation: More Homes on the Market Act
Representative Jimmy Panetta of California, and Representative Mike Kelly of Pennsylvania have introduced the bipartisan “More Homes on the Market Act,” which would increase the allowable gains to $500,000 for an individual and $1,000,000 for a couple. It would also index the exemption for inflation to prevent the same result in future years. Although the bill has been introduced, there is not currently information available regarding when a vote will take place.
We will be keeping an eye out for any updates on this new legislation. If you have any questions about the legislation, give us a call and we will be happy to answer any questions. Plus, stay close to our blog and social channels as we will be posting any further updates that co me out way! Contact us today at 480-759-1576, or visit us at Cusickgroupre.com. We look forward to talking to you!