A National Association of Realtors® report reveals that 16.9% of Nebraska homeowners have exceeded capital gains tax exclusion limits due to rising home equity. Property values have surged by over 260% since 1997, while tax policies remain unchanged. Nebraska taxes capital gains as income, with rates up to 6.64%. This tax reality creates a 'stay-put penalty,' discouraging homeowners from selling. The significant percentage of affected homeowners, while modest compared to states like California, represents a growing concern in the Midwest as more Nebraskans face similar challenges.
The National Association of Realtors® reports that 16.9% of Nebraska homeowners may face capital gains tax issues due to increased home equity surpassing federal exclusion limits.
Since 1997, homeowners have only been able to exclude $250,000 for singles and $500,000 for joint filers from capital gains tax, despite home prices increasing over 260%.
Nebraska's capital gains tax, reaching up to 6.64%, combined with federal taxes, places a financial burden on homeowners planning to sell their appreciated properties.
The 'stay-put penalty' leads many long-term homeowners to delay selling, limiting market availability for younger buyers looking to purchase homes.
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