62.2% of Homeowners in California Will Face a Hidden Home Equity Tax If They Sell

In California, many homeowners face a hidden tax on home sales due to a federal capital gains exclusion unchanged since 1997. Over 62% exceed the $250,000 individual limit, and 30.8% surpass the $500,000 joint filer limit, exposing them to significant federal and state taxes. This discourages selling, tightening inventory and raising prices. Proposed legislation aims to raise and index these limits to inflation.