Of course, we could always experience a curveball that could radically alter the market conditions without notice. If you thought the inventory surge this year was noticeable, wait until this takes effect! Hat tip to Annabama for sending this in:
Today, Congresswoman Marjorie Taylor Greene (GA-14) introduced the No Tax on Home Sales Act—a bold proposal to eliminate the federal capital gains tax on the sale of primary residences. This commonsense reform delivers critical tax relief to homeowners and helps increase housing supply nationwide.
“Families who work hard, build equity, and sell their homes should not be punished with massive tax bills,” said Congresswoman Greene. “The capital gains tax on home sales is an outdated, unfair burden—especially in today’s housing market, where values have skyrocketed. My bill fixes that.”
Currently, the IRS allows an exclusion of up to $250,000 ($500,000 for joint filers) in capital gains from home sales, but those limits haven’t been updated since 1997. As home prices have risen, more middle-class homeowners are being hit with capital gains taxes that were originally intended for wealthy investors.
Congresswoman Greene’s bill would:
- Eliminate the federal capital gains tax on home sales
- Encourage mobility by removing a key disincentive to selling, helping to increase housing supply
- Deliver tax relief to homeowners looking to downsize or relocate without being penalized for appreciation
- Protect first-time buyers by improving inventory and lowering prices in the most constrained housing markets
“Homeowners who have lived in their homes for decades, especially seniors in places where values have surged, shouldn’t be forced to stay put because of an IRS penalty. My bill unlocks that equity, helps fix the housing shortage, and supports long-term financial security for American families,” Greene added.
The bill explicitly applies to individuals selling their primary residence and does not apply to home flippers or real estate investors.
https://greene.house.gov/news/documentsingle.aspx?DocumentID=1125
If you get the sense that there is any chance of this becoming law, list your home for sale immediately. This will drive down prices by 10% within a month.
Too sensible. Therefore will never happen. Even 1/2 of (R) these days will not admit that lowering tax burdens/thresholds increases economic activity. So here we are on our way to 40 trillion in debt. Yee-haw! Just ridin’ it out.
1. No more capitol gains tax
2. The president pushing for interest rates to be 3 points lower
3. Gov workers getting laid off
4. No more illegals (non residents) owning properties
Things could change very quickly in the housing market.
Wow…
I love her disruptive nature. Not because it is a good idea but because it highlights what needs addressing. inflation and tax bracket reep come to mind.
The 250,000/500,000 exclusion should have been indexed for inflation sine 1997. That is just common sense. Just like the income maximum for social security taxes is indexed for inflation.
I’d happily take the one-time price drop to get rid of this tax that seizes up the market.
I didn’t think about this until it was too late, but I’d advise younger people to keep moving every time your gain approaches the 250,000/500,000.
@WC
Now that the BBB has been signed and sealed, that $500k tax free in cap gain could probably be more like $600k depending on the one’s income bracket.
I may want to check with my CPA about that detail.
This may be the best bill I have seen. Require a seller discount price to buyer in order to receive 0% capital gains.
That is called a “win-win” solution for both buyers and sellers.
Real Estate needs more progressive solutions to the housing inventory problem.
The biggest problem I could see is the market heats up to fast again.
Agree – it’s ingenious. Solves everything at once.
If the market were to heat up, it would be for one reason only. Sellers scrambling to get out before prices go any lower.
And why limit to primary residences? Let it apply to all sales! Or at least include some benefit.
Home prices would be -20% within a year.
Sellers are way too stubborn. The deal structure would have to pre-arranged; you exchange 10% discount to price max for the no cap gains deal. This would become part of the standard contract for buyers and sellers to agree or decline.
The sellers will treat it like cost of doing business much like RE commissions, closing costs, etc.
Now if the economy tanks due to loss of massive jobs (not just government) everyone will be in the same predicament.
I do not agree for rentals/investments as the hold times are shorter and there are plenty of breaks already.