Maine homeowners are facing unexpected tax liabilities from capital gains due to outdated federal limits. Nearly 40% exceed the $250,000 exclusion for single filers, with 8.3% surpassing the $500,000 limit for joint filers. This issue is more pronounced in coastal areas like Portland and Camden, where home prices have appreciated significantly since 1997. Current values push modest homes past these thresholds, leading to substantial taxes on gains. Maine's tax code does not provide relief, further burdening long-term homeowners and retirees with increased financial strain.
The capital gains exclusion was designed in 1997 to help homeowners avoid taxes when selling their primary residence. At the time, the $250,000 (individual) and $500,000 (joint) limits covered most home sales. But those limits have never been adjusted for inflation.
Maine homeowners exceeding the $250,000 cap face taxes on an average of $140,329 in gains. For those above $500,000, the average taxable amount climbs to $175,849.
Collection
[
|
...
]