Georgia homeowners have experienced significant increases in property values over the past 20 years, yet many are now at risk of owing capital gains taxes when selling their homes. About 31.3% exceed the $250,000 exclusion for individuals, and 5.5% surpass the $500,000 limit for couples. These limits, established in 1997, have not been adjusted for inflation, despite home values rising by over 260% since then. Georgia applies capital gains taxes at rates up to 5.75%, further complicating financial planning for homeowners looking to use their equity for retirement or major expenses.
More than 1 in 3 homeowners in Georgia are at risk of owing capital gains taxes due to a federal tax rule set in 1997, which hasn't adjusted for inflation.
Home values nationwide have increased more than 260% since 1997, but capital gains exclusions remain at $250,000 for individuals and $500,000 for couples.
If the capital gains exclusion had been adjusted for inflation, it would now be $660,000 for individuals and $1.32 million for couples.
Georgia taxes capital gains as regular income with rates up to 5.75%, compounding tax burdens for those selling their homes to support major life changes.
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