Nearly half of Arizona homeowners could face a significant tax bill if they decide to sell their properties, due to soaring home values in recent years. The issue centers around the federal capital gains tax, which hits when a home’s value increases by more than $250,000 for single filers or $500,000 for couples during their ownership—a threshold more homeowners are now crossing in Arizona’s hot real estate market. This tax is calculated on the profit after allowable deductions, and as property values have climbed, more residents have found themselves unexpectedly subject to higher taxes upon selling.
Experts advise that homeowners keep detailed records of all home improvements and related expenses, as these can be applied to reduce the taxable profit. With Arizona’s housing prices consistently rising, awareness of these tax implications is crucial for anyone considering selling, to better estimate their potential tax burden and strategize accordingly for financial planning.
Read the original Arizona home sales article.
