Over half of Oregon homeowners have accumulated home equity that exceeds the federal capital gains tax exclusion limits. This situation poses a financial risk when selling, as some homeowners may face substantial tax liabilities. Since 1997, home values in Oregon have surged, resulting in increased exposure to capital gains taxes, with top marginal rates reaching 9.9%. This scenario creates a dilemma where homeowners may defer selling to avoid taxes, contributing to a low housing inventory and challenges for new buyers in the market.
More than half of Oregon homeowners may face unexpected tax liabilities due to increased home equity exceeding federal capital gains tax exclusions, potentially losing significant profits on sales.
Oregon homeowners have seen their property values appreciate by substantial margins, leading to what is termed the 'home equity tax' as profits surpass IRS exclusion limits.
As property values increase in Oregon, homeowners become more susceptible to capital gains taxes, with some choosing to stay put to avoid hefty tax bills.
The rise in home values in cities like Portland and Bend has led to a 'stay-put penalty,' where homeowners delay selling to evade tax implications.
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