House Panel Passes Tax Rise on Vacation-Home Sales

Bloomberg reports:

The House Ways and Means Committee, seeking revenue to help homeowners in foreclosure, unanimously approved higher taxes on the sale of vacation homes.

The panel adopted a Democrat-drafted provision that would make it harder for people who sell their second homes to exclude as much as $500,000 in profit from capital-gains taxes. The provision would raise $2 billion in additional taxes over the next decade, according to an estimate by the congressional Joint Committee on Taxation.

Democrats have pledged to pay for tax breaks with offsetting tax increases or spending reductions. The proposal, intended to help pay for a measure to protect mortgage borrowers from taxes on debt forgiven in a foreclosure, would gut a popular tax-saving strategy, Republicans said.

We wonder what's going to happen for the demand for second properties.