Governor Deval Patrick has proposed the taxation of capital gains on the sale of a primary residence as part of a broader effort to eliminate 44 different tax breaks in Massachusetts to raise money for education and transportation.
If a homeowner has lived in their home two out of the last five years, they are currently exempt from federal or state tax on the capital gain a homeowner realizes when they sell their primary residence. The amount of the exemption is $250,000 for single people and $500,000 for married people.
The governor seeks to tax this capital gain at 6.25%. So if there is a capital gain of $100,000, $6,250 will be owed to the commonwealth if the tax increase passes, according to the Massachusetts Taxpayers Foundation.
The REALTOR® organizations will undoubtedly lobby to prevent this tax from happening as it will likely hurt the real estate market, which is in the midst of recovery.
If you would like to send an email to Governor Patrick urging him to keep the tax exemption on the capital gain for a primary residence, click here. You can also contact your representative in the legislature by clicking here.
If you are planning on buying or selling a home in the Pioneer Valley and would like to work with an informed REALTOR® with a comprehensive understanding of the Pioneer Valley Real Estate market, make your first call to Michael Seward at 413-531-7129 or email firstname.lastname@example.org. Michael Seward has been representing home buyers and home sellers in the Pioneer Valley, from the Vermont border to the Connecticut border, for 10 years.
Also, be sure to “like” Facebook.com/WesternMassRealEstate.