3 ms·

It also doesn't help that there are now taxes to pay on house appreciation whenever you sell, so you can't sell and take the proceeds to buy elsewhere since the

It also doesn't help that there are now taxes to pay on house appreciation whenever you sell, so you can't sell and take the proceeds to buy elsewhere since the taxman will take a large chunk of it. It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. Until something changes, many people are stuck in their homes, unless they are willing to accept the huge downgrade in what they can afford if they moved.

sys_64738 3y ago
You can still build 500k$ of equity for a married couple in the USA.
ryandrake 3y ago
> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. The IRS's 121 Home Sale Exclusion still applies which allows you to exclude $250,000 ($500,000 if married) of capital gains on the sale of your primary residence. For an investment property, you can also do a like-kind exchange to defer taxes.
- bombcar 3y ago
  If you really need to, there is a tricky path via that to avoid some tax. You convert the current appreciated house into a rental (this is a non-taxable event). You rent for whatever the required timeline is, and then 1031 exchange it to a more manageable rental in the area you desire (going from overvalued house in the Bay Area to triple-net commercial elsewhere, for example). Then you die and pass it on to heirs.
khuey 3y ago
> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. If you're referring to Section 1031 exchanges in the US, that never applied to houses you actually live in, only investment properties (and it still does).
deleted 3y ago
[deleted]
dbjacobs 3y ago
> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. In the US from 1964 to 1997 you could upgrade your home (i.e., buy one equal or more expensive) and avoid capital gains taxes and after age 55, you could downsize once and not pay capital gains taxes. From 1997, we've had the current regime of $250K/single, $500K/couple exclusion if you lived there 2 of the previous 5 years from the sale.

sys_64738 3y ago

You can still build 500k$ of equity for a married couple in the USA.

ryandrake 3y ago

> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. The IRS's 121 Home Sale Exclusion still applies which allows you to exclude $250,000 ($500,000 if married) of capital gains on the sale of your primary residence. For an investment property, you can also do a like-kind exchange to defer taxes.

bombcar 3y ago
If you really need to, there is a tricky path via that to avoid some tax. You convert the current appreciated house into a rental (this is a non-taxable event). You rent for whatever the required timeline is, and then 1031 exchange it to a more manageable rental in the area you desire (going from overvalued house in the Bay Area to triple-net commercial elsewhere, for example). Then you die and pass it on to heirs.

khuey 3y ago

> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. If you're referring to Section 1031 exchanges in the US, that never applied to houses you actually live in, only investment properties (and it still does).

deleted 3y ago

[deleted]

dbjacobs 3y ago

> It used to be that if you sold one house and bought another for same price then there would be no appreciation taxes, but that stopped a few(?) years ago. In the US from 1964 to 1997 you could upgrade your home (i.e., buy one equal or more expensive) and avoid capital gains taxes and after age 55, you could downsize once and not pay capital gains taxes. From 1997, we've had the current regime of $250K/single, $500K/couple exclusion if you lived there 2 of the previous 5 years from the sale.