economy

March 4, 2026

There’s a push to cut capital gains taxes on home sales

Some lawmakers want to reduce or eliminate capital gains on home sales. Here's how that could impact housing affordability.

There’s a push to cut capital gains taxes on home sales

TL;DR

  • Lawmakers are proposing reductions or eliminations of capital gains taxes on home sales to address the U.S. housing shortage.
  • Current law allows single filers to exclude up to $250,000 and married couples up to $500,000 in profits from capital gains on primary home sales.
  • Proposals include indexing the asset's basis to inflation or increasing exemption limits, with some suggesting eliminating the tax for first-time homebuyers and sales of rental homes to tenants.
  • Supporters believe these tax breaks would encourage long-term property owners to sell, increasing housing inventory for potential buyers.
  • Experts offer mixed opinions, with some arguing the tax reform could free up housing stock, while others contend it would do little to solve the supply problem or impact seller behavior, especially for senior households.

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