Is It Too Expensive to Sell a House?
The New York Times • • technology
Key Points:
- Approximately 7.2 million single-family homes in the U.S. are vacant and off the market, contributing to a housing shortage, according to Flock Homes.
- Many older homeowners, particularly those 65 and older who have paid off their mortgages, choose not to sell due to high tax liabilities outweighing the benefits of selling.
- Taxes such as capital gains and depreciation recapture create significant financial barriers, with total tax liabilities often exceeding $100,000 for sellers aged 65 and older in major metro areas.
- In Los Angeles, the average tax cost for older homeowners selling their homes is $185,000, while the annual expenses of maintaining an empty home are around $10,000, making it more economical to keep properties vacant.
- The federal capital gains exemption for primary residences was not included in the analysis, and mortgage payments were excluded since many older owners have fully paid off their homes.
