The ‘hidden’ tax that could threaten America’s fast-growing real estate boomtowns
A new report highlights a hidden home equity tax that could impact homeowners in fast-growing real estate markets across the U.S. The National Association of Realtors estimates that about 15% of owner-occupied households have unrealized gains exceeding the capital gains exclusion. This situation is particularly acute in cities like San Jose and Urban Honolulu, where a significant percentage of homeowners are at risk due to rising property values.
- ▪The hidden home equity tax may affect homeowners in fast-growing markets as prices increase.
- ▪Approximately 13.1 million homeowner households have unrealized gains above the capital gains exclusion.
- ▪Cities like San Jose and Urban Honolulu have over 50% of homeowners at risk due to high property values.
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Real Estate The ‘hidden’ tax that could threaten America’s fast-growing real estate boomtowns By Allaire Conte Published May 20, 2026, 2:29 p.m. ET See more of our coverage in your search results. Add The New York Post on Google Originally Published by: Long-Abandoned Brooklyn Brownstone Hits the Market for $15M A $75K Income Buys Access to Only 23% of Listings, Report Finds Sellers Left $1.9B on the Table Over Three Years by Using Dual Agents When Realtor.com® first exposed the hidden home equity — a year ago, it looked like a penalty on patience. The risk was most acute in places where decades of appreciation had pushed long-tenured homeowners past the capital gains exclusion for primary home sales — potentially exposing them to federal tax rates as high as 20%.
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