Capital gains tax may be one of the most under-discussed drivers of today’s housing inventory constraints.

 

According to recent reporting by Newsweek, the current capital gains exclusion thresholds for primary residences were established in 1997 and have not been adjusted for inflation. Since that time, home values across the country, including throughout Oakland County, have appreciated significantly.

 

For long-term homeowners, that appreciation represents both equity and potential tax exposure.

 

Under current federal law:

Those thresholds have remained unchanged for nearly three decades.

 

In many Oakland County communities, homeowners who purchased in the early 2000s have seen meaningful long-term appreciation, which can materially impact capital gains exposure under current law.

 

Policymakers are revisiting the framework, with bipartisan proposals aimed at modernizing the exclusion thresholds and indexing them to inflation.

 

Nothing has been enacted. These are active policy discussions, not finalized law.

 

The objective behind these discussions is straightforward: reduce the tax burden tied to long-term appreciation and improve housing mobility.

 

Inventory constraints remain one of the most persistent structural challenges in today’s housing market.

 

While mortgage rates often dominate headlines, capital gains exposure can create another form of seller hesitation. Some long-term homeowners delay listing simply to avoid triggering a significant tax liability tied to decades of appreciation.

 

Adjusting exclusion thresholds would not solve supply challenges overnight. However, economists suggest it could encourage additional resale inventory over time, particularly in higher-equity markets.

 

If you have owned your home for 15 years or more in Birmingham, Bloomfield Hills, Rochester, Clarkston, Franklin, Northville, Novi, Plymouth, or surrounding Oakland County communities, understanding your capital gain position is important.

 

As both a former CPA and a Birmingham-based luxury real estate advisor, I approach real estate decisions from both a financial and market strategy perspective.

 

If you are considering selling, whether now or in the future, a confidential review of your potential capital gain exposure alongside a current market valuation can provide clarity.

 

Thoughtful timing matters.

 

248.724.6124 | [email protected]

 

Capital gains tax may be one of the most under-discussed drivers of today’s housing inventory constraints.

 

According to recent reporting by Newsweek, the current capital gains exclusion thresholds for primary residences were established in 1997 and have not been adjusted for inflation. Since that time, home values across the country, including throughout Oakland County, have appreciated significantly.

 

For long-term homeowners, that appreciation represents both equity and potential tax exposure.

 

Under current federal law:

Those thresholds have remained unchanged for nearly three decades.

 

In many Oakland County communities, homeowners who purchased in the early 2000s have seen meaningful long-term appreciation, which can materially impact capital gains exposure under current law.

 

Policymakers are revisiting the framework, with bipartisan proposals aimed at modernizing the exclusion thresholds and indexing them to inflation.

 

Nothing has been enacted. These are active policy discussions, not finalized law.

 

The objective behind these discussions is straightforward: reduce the tax burden tied to long-term appreciation and improve housing mobility.

 

Inventory constraints remain one of the most persistent structural challenges in today’s housing market.

 

While mortgage rates often dominate headlines, capital gains exposure can create another form of seller hesitation. Some long-term homeowners delay listing simply to avoid triggering a significant tax liability tied to decades of appreciation.

 

Adjusting exclusion thresholds would not solve supply challenges overnight. However, economists suggest it could encourage additional resale inventory over time, particularly in higher-equity markets.

 

If you have owned your home for 15 years or more in Birmingham, Bloomfield Hills, Rochester, Clarkston, Franklin, Northville, Novi, Plymouth, or surrounding Oakland County communities, understanding your capital gain position is important.

 

As both a former CPA and a Birmingham-based luxury real estate advisor, I approach real estate decisions from both a financial and market strategy perspective.

 

If you are considering selling, whether now or in the future, a confidential review of your potential capital gain exposure alongside a current market valuation can provide clarity.

 

Thoughtful timing matters.

 

248.724.6124 | [email protected]