A New Jersey congressman is introducing a bill that would allow older adults in the state to avoid capital gains taxes when they sell their homes as long as they put the proceeds from the sale into a Roth IRA to be used in retirement.
The Senior Housing Improvement and Retirement Accounts Act of 2020 was announced Monday by state Rep. Josh Gottheimer, a Democrat. Gottheimer said the bill, which he said has bipartisan support, also will encourage people to increase their savings and stay in the Garden State.
“This extra boost toward retirement will help seniors who want to downsize, once their kids are out of the house, and afford to stay in New Jersey instead of packing up and moving elsewhere to places like Florida and North Carolina,” he said in a prepared remarks.
The legislation, if passed as written, would apply to homeowners who have owned their primary residences for at least 20 years and who are aged 55 or more years. The legislation also would exempt those nearing retirement from the current Roth IRA contribution limit of $7,000 to allow for greater savings from these home sales.
“Imagine being able to jump-start your retirement by $50,000 or more. That could change where, when and how you retire,” Gottheimer said.
New Jersey residents pay the third-highest property taxes in the country, and for the second consecutive year, more residents moved out of the state last year than any other state, Gottheimer said. WalletHub ranked New Jersey as the fifth-toughest state in which to retire, he added.