South Carolina homeowners are increasingly at risk of unexpected capital gains taxes upon selling due to rising home equity. Over 25% exceed IRS exclusions, while 6.3% surpass the $500,000 cap for married couples. Federal exemptions of $250,000 for singles and $500,000 for couples have remained unchanged since 1997, rendering them outdated as home values have surged by over 260%. Homeowners in metro areas may face significant tax liabilities, discouraged from downsizing due to a "stay-put penalty", resulting in fewer available homes for buyers.
More than a quarter of South Carolina homeowners could face a surprise tax bill if they decide to sell because they have built up excess home equity.
The federal capital gains exemption hasn't changed since 1997, while home prices have risen over 260%, making it increasingly irrelevant for homeowners.
Homeowners face significant tax liabilities on long-term gains if their profits exceed IRS exclusions, particularly affecting those who've owned homes for longer periods.
The rise in home prices has resulted in a 'stay-put penalty', discouraging longtime owners from downsizing, leading to fewer listings and higher competition for buyers.
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