The Real Estate Sage

The new capital gains law permits home owners to avoid paying taxes on the first $500, 000 of profit if they are married and if they are single, $250, 000. You must have occupying the house for two of the last five years as your primary residence. You are allowed to use the provision as frequently as you like so long as it fits in the two year period. Any gains above the limit will be charged and taxed to you at the new 20% capital gains rate which is down from the current 28%. In the old law you could roll over gains if you bought a much expensive house, if you sold a more expensive house and purchased a cheaper one you are liable to gain tax; but under the new law this provision is no longer in effect.