Aww these poor Boomers just made too much money on their homes and now they have to pay some taxes if they want to sell for huge profits. Boo fucking hoo.
While also taking away starter homes.
What the fuck am I supposed to live in?
I'm sick and fucking tired of moving from rented basement, to rented attic, to basement, to garage... Etc... every 2 goddamn years I have to move. I'm almost 40, never going to be married, and stuck renting absolute overpriced shit. I'm so over it.
Article is lying by omission
The only way they pay cap gains is if this is a second house
Also must be nice to be able to afford a 3000 sq ft home on a retired teachers salary...fuck these ppl honestly.
The only way they pay cap gains is if this is a second house
Not the only way. There are several different ways you might have to pay cap gains on a home that isn't a second home.
But for the article its likely this way they have to pay:
"Both the IRS and FTB provide a capital gains tax break for home sellers who meet certain conditions. The maximum amount of capital gain that can be excluded is $250,000 for single filers or $500,000 for a married couple filing jointly." source
From OPs article:
"The taxable gain of $1.4 million at 20% would mean those homeowners are facing a $280,000 tax bill. In a state like California with additional tax, the overall payment would be over $450,000."
They bought the house at $100k, and are walking away after taxes with $1.55m. Boo hoo? They're saying they get a big tax bill because of inflation, but they're also able to sell their house for 19x what they bought if for for similar reasons. If they want to sell it to me for $600k and have zero cap gains taxes, I'll take them up on that offer.
They also spent years reaping the lower taxes from prop 13 which saw their property taxes only raise by a max of 2% per year.
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax. That’s providing the sale is of the homeowner’s primary residence and that they meet other requirements such as living in the property for two of the past five years.
That means if a couple bought a median priced home in 1987 for $100,000 and they’ve lived there as their primary residence and are selling it today for $550,000, the $450,000 gain from that investment is not taxed because it falls under the $500,000 exclusion to capital gains taxes.
However, if those same $100,000 homebuyers lived for 37 years in an area that has seen enormous growth in home values — as is the case for many parts of California — and their home now sells for $2 million dollars, that’s nearly $1.9 million in profit, of which only $500,000 is excluded from taxes.
Oh, how horrible. /s
If it was just a problem of paying more taxes then the argument would be bullshit. The main problem is buried at the end of the article:
A homeowner who keeps all the profit of a home that sells for $500,000, for example, may find that a condo in their same area, where they can age in place, is $450,000. After calculating realtor fees and closing costs, the profit hardly covers the new purchase, let alone provides any extra income for retirement.
This is the real reason they are not moving. They would be stepping backwards financially instead of stepping forward.
Feels like the crux of this whole thing is that housing shouldn't be an investment.
Good luck changing that. Housing has been a promised vehicle for wealth growth to multiple generations.
... What's the issue?
They paid for the next place, including fees, and still have $50k in their pocket? How greedy does someone need to be, exactly, before we consider the behavior repugnant?
Condos generally aren't much cheaper than houses. They would have the same issue if their region's real estate was half as expensive. They would have had this problem 10, 20, 30 years ago if they were retiring. If you sell a house in an expensive area and want money left over, you either have to choose a shittier house/apartment to live, or a cheaper area.
Yeah no sympathy for large taxes on massive capital gains. Especially capital gains from the massive increase in housing costs
Seriously, wtf are they whining about. "If I subtract the money we paid from the current market value of our house we get such a nice number, but now we have to lose 14% of that 😭😭😭😭"
Maybe they should just move to a lower cost of living area, away from where they've lived their whole life? You know, like they've been telling their kids and grandkids they need to do to make ends meet.
The entire argument comes down to "oh, those poor people, they have to pay their fair share of taxes on the huge amount of equity they've just earned". Seriously, the bias is disgusting.
So they pay those taxes with the gains from the sale? What's the fucking problem?
But unless this is a 2nd home, I don't think they'll pay anything unless it's over some high amount.
If they're in California, they might have gains of over a million dollars. The exemption cuts off at $500k of total gains; anything beyond that has to have taxes paid.
So they're whining about paying taxes on a million dollar capital gain. They can go fuck themselves.
Ya to me this sounds more like people complaining they aren't making as much money as they want to?
Hey they earned those gains through privilege and luck!
It reminds me of the people afraid to get a raise because they think going into the next tax bracket means they make less money.
Oh, no, boomers have to pay taxes on the MASSIVE gains on their cheaply purchased houses now worth millions. Cry me a river.
They already get to exclude $250,000 of increase (or $500,000 if married filing jointly). So a married couple selling a house they bought for $50k and sold for $550,000 pays no taxes at all!
So boomers need to shut the hell up.
Article title should be "people who treated a basic need as an investment crying that they cannot realize the overinflated value of their investment without becoming homeless". 🙄
One example given in the article shows the sellers would walk away with $1.55m after all taxes paid. I'm sure many would love to be so homeless.
The article also considers people buying a new place instead of renting. Yeah rent has also spiked, but that $1.5m still pays for 25 years of renting a condo for $5,000/month.
Also from the article:
"Both over 70, the Dragos are empty nesters"
So the essentially have rent paid for until they are 95 or 104 just from the sale of their house.
This is nonsense. The tax-free allowance is massive and they're only required to pay tax on all the free money, nothing they actually earned.
If there was 100% capital gains tax on all domestic property, we wouldn't have all that free money pushing up the cost of housing for everyone.
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax. That’s providing the sale is of the homeowner’s primary residence and that they meet other requirements such as living in the property for two of the past five years.
So assuming their house is worth $1M, they get $500k tax free and pay 14% on the remaining $500k, or $70k which comes out to 7% of the sale price. $930,000 doesn't seem like too bad of a haul.
They were empty nesters 10 and 20 years ago too most likely. They got greedy and now they don't want to pay tax on the absurd increase in value of their house?
Cry me a river. The only feelings this should spark in anybody reading it is anger and hatred. Greedy, repulsive people.
Otherwise known as: boomers wanting to downsize are making a whole bunch of cash with which to do it and are finally paying a fair portion of their net worth.
Awwwe, are these people crying in realized gains? Boo fucking hoo.
A 3000 sqft house in CA? Going to guess they would be making a ton off that. Couple that with the years and years of property taxes being taxed at below the appraised value and I am going to say I don't have much sympathy.
Whatever. They just don't want to pay anything. Probably bitch about the real estate agent fees, too. They're only trapped by their own greed.
Guess they are using the alternate definition of trapped. They of course could rent the house and use the rent money to rent/buy thier new place and probably have a little profit at the same time.
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.