Millions of homeowners could finally get a tax break that’s been frozen since 1997
Baby boomers and other Americans who have been staying put in their homes for decades could get some encouragement to finally sell, thanks to two nearly identical bills in the House and Senate that are gaining more bipartisan traction. Congress has been weighing two bills, both dubbed the More Homes on the Market Act , which propose doubling the amount of capital gains that taxpayers can exclude…
Two nearly identical bills in the House and Senate aim to provide relief for homeowners who have been reluctant to sell due to the tax penalty for decades. Known as the More Homes on the Market Act, these bills propose doubling the capital gains tax exclusion for primary residences, from $250,000 to $500,000 for single filers and $1 million for married couples filing jointly.
This change, which has been in place since 1997 despite housing prices tripling, could significantly benefit long-time homeowners with substantial home equity. Currently, only about one-third of homeowners have more equity than the $250,000 exclusion, a figure projected to rise to 56% by 2030. The bipartisan support for these bills has grown, with over one-third of Congress members co-sponsoring both versions.
Housing affordability has taken center stage this year, with a major housing bill passed in June. The bills have received backing from various trade groups and think tanks, including the Niskanen Center, which advocates for modifying inheritance laws to further boost the single-family housing market. Advocates argue that this legislation will free up housing inventory, ultimately benefiting first-time homebuyers by reducing the need to sell existing homes.
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