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This boomer couple would be hit with $700,000 tax bill if they sold their mansion
(www.businessinsider.com)
this post was submitted on 07 Aug 2025
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Let’s say I want to sell my (cheaper) home and buy another one — the same type of house, but I want to move. Well, I can’t, because as soon as I sell it and get taxed, I can’t afford to buy a house anymore. These aren’t landlords. We’re talking primary home residence.
For the people downvoting me: as average home prices increase in value you will eventually be unable to sell your home and move anywhere else. We went from $200k average home prices to $500k in just a few years. Ordinarily you would sell your current house and buy another one, but with this tax you can’t afford to do so. You’re locked in forever. Welcome to a shitty housing market.
That's not how this works. Not how any of this works at all. God damnit people need to keep their traps locked shut.
If you keep a profit from the sale, you get a tax on the profit at the end of the year.
Even if you use the proceeds to immediately buy another house, you still have to pay the tax, unless you are a landlord then you get a tax break, because we must protect those landlords but not private homeowners...
So you may be at a 15% or so disadvantage looking for a new place to live if you wanted to sell your property and move.
No you don't get taxed at sale and even if you did booo fucking hoo. If you're sitting on 500k+ in gains after downsizing then eat it and pay the tax. I'll play a sad violin story for the top 2% in the richest nation in the world.
I can't move because of these taxes 🙄 fuck off with that circle jerk
As a private homeowner you want to trade your $500k house to move near an adult child after your spouse dies. With the housing markets being equal, you end up owing a ton of capital gains tax but having to spend more just to try to keep even.
Or, as the tax code seems to want to encourage, the private homeowner becomes a landlord because that at least might let them keep pace with a new mortgage they have to take on.
It's crazy that we give tax advantage to landlords and deny them to people actually using their houses.
The “profit” is realized as soon as the sale goes through. Your financial illiteracy and the confidence with which you wield it is astonishing.
The first 250k (500k for a couple) of profit from your primary residence (if lived in at least 2 years) is excluded from taxation.
You'd only pay taxes if you made a profit on your home sale.
The issue is that a “profit” on a home sale is not a profit at all, since that money needs to be dumped back into the purchase price as soon as you move. The tax straight up makes it impossible for families to MOVE. What are you not understanding? These aren’t landlords. They’re just people trying to move from point A to point B.
To explain in a nicer way where your error in thinking is:
You don't pay the taxes specified in the article on the whole amount of money you get for selling your house, only on the increased value compared to when you bought it.
So as example: you buy the house for 1 million and sell it later for 2 million. Then the tax in the article is only applied to the 1 million difference, so you only give away part of the money that you got in addition to the value you bought the house for. So you always end up with more money than you paid for the house, just not the full value.
Right but the rest of the housing market has also moved on. The cost basis of that house won't come anywhere near buying equivalent housing in the present
Let's say you bought a decent house back in the day for 100k, and now that house can go for 500k because it's a typical family home and all those homes are now 500k.
Let's say your spouse dies and you could stand for a different house, maybe closer to a family member that can help take care of things. You can sell your house for 500k, but you are left with only 420k that you keep. Sure you could easily afford 100k homes if they still existed, but now homes cost as much as you sold yours for.
The real kicker is there is a like-kind exemption that would negate this, but it's not allowed for your actual primary residence, only as an investment property. Landlords are protected from this but residential homeowners are not.
I don’t have an error. If you buy a house for $200k (average price for houses in the US some years ago) and it now costs $500k (average price for houses in US today), this tax makes it LITERALLY impossible for you to sell your house and buy another one. This is a new phenomenon.
That part is normal?
For real estate there is always a loss involved. Because multiple people and their work are involved and the state also wants their taxes of course. What you want seems to be 'government not involved' market of real estate and I'm not really a fan of unregulated markets. They tend to fuck us normal persons even more.
The discussion for this article is about downsizing the house and that is definitely possible, even after paying that tax.
You think it’s normal to lock the US population into place, decrease housing market liquidity, reduce inventory, and drive up home prices?
Here’s what I think is normal: the primary residence, which is traditionally the primary stock of wealth for the working and middle classes, should not be taxed. Period. Your second house should be taxed. Your third house should be taxed. Your huge boat should be taxed. Not your home.
People need to stop their war on the US middle class, which is rapidly disappearing. The majority of the wealth is in the hands of the top 1-10%. Not the middle 50, or the working poor, who are the most impacted by this moronic tax.
Behold, the impact of property taxes: