A significant portion of Utah homeowners may encounter substantial tax liabilities when selling their homes, as 61.2% exceed the federal capital gains tax exclusion. The IRS exclusion hasn't been updated since 1997, while national home values surged over 260%. This situation leads to unexpected tax bills for homeowners, particularly in fast-appreciating markets. Utah taxes capital gains at a flat 4.5%, which adds substantially to sell profits. Many homeowners are reluctant to sell, resulting in tighter inventory and difficulty for new buyers.
Homeowners in Utah face potential tax liabilities as 61.2% have built up home equity exceeding the $250,000 federal exclusion, risking profits upon selling.
Since 1997, the IRS capital gains exclusion hasn’t been updated while national home prices rose over 260%, leading more homeowners to unexpected tax bills.
The capital gains tax in Utah is levied at a flat 4.5%, compounding with federal taxes to deduct tens of thousands from home sale profits.
High real estate appreciation in areas like Salt Lake City pressures homeowners to delay selling, resulting in a 'stay-put penalty' that restricts market inventory.
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