The biggest tax impact is the 500/250k home sale capital gains tax exclusion. Right now, you can get tax free after living in your house for 2 out of 5 years. The new tax bill will change to 5 out of 8 years.
This impact on individuals could be huge. Will they start the new 5/8 requirement on homes bought after 12/41/2017, or sold after 12/31/2917?
We don’t see a flooding of homes for sale now, so I guess the new rules will only apply for future buyers.
This rule will reduce the frequency of home buying and selling. It favors stability and will be good for quality of life. I’m not sure whether the impact on home price is neutral
This will reduce the flippers buy the home, remodel claiming as primary and then selling it to take 500k profit. It is easy to hold 24 months as some of the remodel/extension takes that long.
No offense to anyone.
Government trying to support genuine home owners and avoid flippers claiming capital gain extension.
If true, must be small time flippers, because one cannot simultaneously have 2 primary homes right? That means one can use this benefit sequentially and only once every 2 years. Hence, frequency of turnover is verry low.
Under section 1402 this is what it says “EFFECTIVE
DATE
The amendments made by
this section shall apply to sales and exchanges after De-
cember 31, 2017”
I guess many people did not realize this. There’s no rush sale now. This has a huge impact but media does not give people a heads up. Totally useless information was running over and over
I completely agree. I tried really hard to find dates and good information and it was basically impossible. I still haven’t been able to work out status of HELOCs - are they tax deductible and if I get one before dec 31 is that too late?
It is already done deal. If someone claimed primary in 2 years before and sold, their chance to sell it before 31, dec 2017. Othewise, 5 year rules effective after an 1st.
Yes, think of through out USA. Second, even genuine primary users are moved from 2 years to once in 5 years. In 30 years, theoretically 15 times they can claim, but now only 6 times possible.
I could see capping property tax deduction at $10k stopping people from trading up. If prop 13 keeps your current property tax below that, then trading up to pay over $10k in property tax is tougher to swallow.
Black Knight Data & Analytics Executive Vice President Ben Graboske says that almost 3 million first lien mortgages – current mortgage holders - have original balances exceeding $500K – the cap proposed in the House version of the tax bill.
“These borrowers would be exempt from the limit. We’ve already seen signs of ‘interest rate lock’ on the market, as homeowners with low interest rate mortgages have a disincentive to sell in a rising rate environment,” Graboske warns. “Do these homeowners now also have a disincentive to sell their home in order to keep their current interest rate deduction of up to $1 million?”
Supply will further go down, and so price will soar. At least in supply-constrained markets like the Bay Area.
I think that’s the theme of the GOP reform. It helps rich capitalists like company owners and land owners, but punish middle class wage earners. The goalpost has actually moved higher. Even upper middle class can’t find any love from GOP nowadays.
There’s a bill in Congress to increase the capital gains exclusion to $1MM. “H.R.1321 - More Homes on the Market Act.” Ask your congressional representative to support it if you agree. (I’m new here and could not find how to post a new topic. This one seemed relevant.)
Well, first of all, this bill was introduced back in 2023 so what is taking so long? Not looking good, but with the House and Senate and everything else including your PTA and Boy’s Club now ruled by the Republicans I suppose it might happen in 2025. I won’t believe it until I see it…