Delaware homeowners are facing unexpected capital gains tax burdens due to a tax exemption rule that has not been updated since 1997. As home prices have increased over 260% nationally, around 25.8% of homeowners in Delaware have exceeded the $250,000 exclusion limit for single filers, with 3.9% surpassing $500,000 for married couples. Consequently, long-term owners, many having bought their homes decades ago, are now liable for capital gains taxes on profits they presumed to be tax-free. This discourages some from selling amid rising market prices.
Homeowners in Delaware face a potential capital gains tax burden due to outdated exemption limits, with 25.8% exceeding the $250,000 exclusion for single filers.
The capital gains tax exemption has not been updated since 1997, failing to keep up with home price appreciation of over 260% nationally.
Since 1997, home price growth has significantly outpaced the capital gains exclusion caps, leaving many long-term homeowners vulnerable to unexpected tax liabilities.
Older homeowners, who have owned their homes for several decades, are particularly at risk of facing capital gains taxes on their expected nest egg from sales.
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