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.

A normal.person would still be ecstatic...

I will never tire of people showing us exactly what kind of people they are going to be when they grow up.

Fuck boomers

I mean it’s not like we can afford the big houses either. To prevent unrest governments should keep a close eye on the accessibility of bread, shelter, and grog.

This is part of a growing class of "house rich, cash poor" people.

They can't afford to move because the sale price of their existing (oversized) houses would not be enough to buy existing stock of smaller houses, in spite of the crazy market. The old houses they live in are increasingly in exurbs or even age-restricted communities that the kind of new family that might need a house that size can't be in for totally different reasons.

Plus they might want to stay in that community. Maybe that's where their friends or family are. Their doctors. All that kind of stuff. And it's not unreasonable for a person to want to keep living where they have a social network.

They also can't rent out rooms or ADUs because local zoning laws arbitrarily forbid it either directly or by enforcing things like minimum parking requirements that are not achievable. Which would be one great way to increase housing supply and let people stay where they are; turn extra space into more housing. But these boomer houses tend to be in the most restrictive type of suburbs that stifle the rights of the homeowners and prevents sustainable growth.

They increasingly don't have pensions because those disappeared in their lifetimes. Retirements funds got fucked by a variety of financial catastrophes in the intervening years, so they're increasingly relying on social security checks to pay for their (mandatory) car, big ass house expenses, and all that stuff. They're living well above their means and even if they realize it and want to make a change, the actual ability to do so is a massive problem.

The net result of this situation is even more tightness in the housing market. Even less real stock, since the ability to downsize is so lousy.

This thread has a sure lot of angry people and boomer hate in it. Which I get, but this is all part of the same housing problem with the same solutions -- more low-cost/smaller homes need to be built and fewer restrictive codes/zoning rules preventing common-sense housing. A lot of people want to develop the properties that people want to buy, but city policies are often the biggest obstacle to them -- that and lack of financial products to fund development thanks to the gradual snuffing out of local banks.

Perhaps the real problem is here:

https://www.amortization.org/inflation/amount.php?year=1997&amount=250000

If the $250k exclusion was indexed for inflation, it would be nearly $500k now. I think it's dumb that all tax-related things aren't indexed for inflation. But I know why: if they did, then the forecasts on how much the exclusion would cost the Treasury would have been higher, and it never would have passed Newt Gingrich's House