Housing Bill: Change to Home Sale Tax Exclusion Rule
by Tom on July 31, 2008
in Education, Market Musings
Once again, hats off to Calculated Risk for doing the due diligence and reading the whole new housing bill. Here’s an example of the “fine print” that others might have missed: (More comments below)
Under the new rule, the owner only gets a percentage of the exclusion based on a ratio of how long the property is their primary residence divided by how long they owned the property. This prevents people from moving into vacation homes or rental units for two years and then obtaining the entire exclusion.
Calculated Risk: Housing Bill: Change to Home Sale Tax Exclusion Rule.
So what does that mean? For most people who only own one home, nothing much. But if you have a cottage and a house, and at retirement, sell the house and move into the cottage and then a few years later, sell the cottage and go condo (or whatever). It’s going to affect your tax liability then. Please consult your tax advisor for more details (I’m not an accountant and I don’t even play one on TV!)
Tom Vanderwell
