Why So Many Zombie Homes? The Dreaded Exit Tax

The nation has a housing shortage, and yet an estimated 7.2 million "zombie homes" are sitting empty with their owners unwilling to put them up for sale. It's not about keeping a second home in desired locale. As a story in the New York Times and stats from Flock Homes explain, many are off the market because it would cost the owners too much in taxes to sell them. Think capital gains and, in the case of rental homes, "depreciation recapture" taxes. Together, they add up to a dreaded "exit tax." The amount can easily exceed $100,000 in big markets, while the cost of keeping the home empty might be closer to $10,000 (not counting mortgage payments, often nonexistent for older people) Some cities are worse than others:

• Los Angeles, 19 years for expenses to exceed the exit tax
• Salt Lake City, 16 years
• San Jose, 15 years
• San Diego 15 years
• Phoenix, 14 years
• San Francisco, 14 years
• Sacramento, 14 years
• Las Vegas, 13 years
• Washington, 12 years
• Portland, 12 years
• Denver, 12 years