When Equity Feels Like a Trap: What Ventura County Homeowners Should Know About Capital Gains Limits
Owning a home comes with pride, responsibility, and—hopefully—significant financial gain over time. But for many longtime homeowners, the very wealth they’ve built through years of responsible ownership has quietly become a burden.
If you’ve lived in your home for decades and watched its value rise, you might be surprised to learn that the current tax code hasn’t kept up—and it could be costing you.
Let’s break it down.
A Policy That’s Stuck in the Past
Right now, if you sell your primary residence, the IRS allows you to exclude up to $250,000 in profit from capital gains taxes if you’re single, or $500,000 if you’re married and filing jointly.
Here’s the problem: those thresholds haven’t changed since 1997.
Home values, especially in areas like Ventura County, have risen substantially since then, but the tax exclusions have not. As a result, homeowners who’ve stayed put and built wealth through appreciation may now face surprise tax bills simply for doing what homeownership was designed to do: build equity.
The Data Paints a Concerning Picture
According to a new study commissioned by the National Association of REALTORS®:
- 34% of homeowners already have enough equity to exceed the $250,000 cap.
- That number could rise to over 56% by 2030, and 70% by 2035.
- In California and other high-value states, many homeowners could owe taxes on equity that was meant to secure their retirement, not penalize it.
This is what some housing economists are calling the “stay-put penalty.”
The “Stay-Put Penalty”: How It Affects You (and the Market)
Many Ventura County homeowners, especially retirees and downsizers, want to move. Whether it’s to reduce maintenance, be closer to family, or transition to a lifestyle community, the desire is there.
But that move may come with a tax hit they can’t justify.
So they stay. And when longtime owners don’t sell, it reduces housing inventory across the board, affecting every type of buyer, from first-timers to growing families.
What should be a moment of freedom and reward instead becomes a trap.
A Potential Solution: The More Homes on the Market Act
To address this growing issue, a bipartisan proposal in Congress—called the More Homes on the Market Act—aims to modernize capital gains exclusions for the first time in nearly 30 years.
Here’s what the bill proposes:
- Double the exclusion to $500,000 for single homeowners and $1 million for married couples.
- Adjust for inflation going forward so we don’t fall behind again.
- Reduce the disincentive to sell, which could unlock millions of homes for today’s buyers.
It’s a long-overdue fix that honors what homeownership is supposed to be about: opportunity, not penalty.
What This Means for Ventura County Homeowners
If you’re thinking of selling your longtime home—whether to downsize, relocate, or just simplify—it’s important to know your potential tax exposure and plan accordingly.
As your agent and advisor, I help clients:
- Estimate capital gains and understand your exemption
- Connect with trusted tax professionals
- Weigh timing strategies to reduce tax burdens
- Navigate the emotional and financial aspects of a major transition
You’ve built equity through years of care and commitment. Let’s make sure you can use it to move forward, not feel stuck.
Let’s Talk About What’s Next
You deserve to enjoy the home you’ve invested in—not be penalized for it.
If you’re considering a move and unsure how capital gains might affect your plans, let’s have a conversation. Whether or not this legislation passes tomorrow, there are smart, strategic ways to move forward today—and I’d be honored to help you explore them.
📞 Call Roylin Downs at 805-850-5443 or send me a message to schedule a personal consultation.
Let’s turn your home’s value into the next chapter you’ve been waiting for.
