Changes to U.S. Tax Codes May Discourage Increase in Home Size

One factor driving up the size of American homes may have been removed with the recent changes to the U.S. tax code. The August 8, 1997 issue of the lumber industry newsletter Eastern Quotes & Comments notes that people who sell homes in expensive markets and retire to less expensive areas often bought huge houses to avoid paying the capital gains taxes they would have owed had they bought an inexpensive house. The new release from capital gains taxes upon sale of a primary residence removes this perverse incentive for empty castles.