Houses are not taxed based on any gains at all. Houses are taxed based on a government issued current valuation. People complain about the accuracy of these valuations all the time, but the taxation has nothing to do with capital gains. If it was a tax on capital gains, then you’d only be paying a tax on the difference in valuation from year to year. Which isn’t how it works at all. It’s more of a wealth tax.

I said unrealized gains not capital gains.

The government doesn’t limit it’s valuation of the house to a demonstrated sales price but instead uses an estimate for the market price. Doing the same with stock is easy, they just hand out a tax break instead.

> I said unrealized gains not capital gains.

Unrealized (capital) gains…

In California, home valuation increases are capped to 2% per year via Proposition 13 and decreases follow the market. If your house doubles in value, most of that growth is still unrealized until you decide to sell.

That’s still unrealized gains even if it’s not the fair market price.

Agreed.