In New Hampshire, the homeownership dream is complicated by tax implications. A significant number of homeowners have home equity that surpasses the federal exclusion limits for capital gains, which have not changed since 1997. While New Hampshire does not impose a state capital gains tax, many homeowners remain unaware of their potential liabilities until selling. Long-term homeowners are particularly vulnerable, as appreciation in property value can lead to hefty tax bills, making them hesitant to list their homes and affecting market inventory.
In New Hampshire, 50% of homeowners have more home equity than the IRS exclusion for capital gains tax, with 9.3% of married couples exceeding the $500,000 limit.
The federal capital gains exclusion has remained unchanged since 1997, despite home values increasing by over 260% nationwide, affecting middle-class homeowners.
Long-term homeowners, particularly those who have paid off their mortgages and improved their properties, face significant tax bills when selling their homes.
New Hampshire's lack of state capital gains tax alleviates some burden, but many homeowners are unaware of their tax exposure until ready to sell.
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