🏡 Time to Revisit Capital Gains Rules?
Let’s take it back to 1997—Titanic ruled the box office, we all had pagers or flip phones, and Congress set the current capital gains tax exclusions for homeowners. Flash forward nearly 30 years: home prices have more than doubled, but the tax rules? Still stuck in the 90s.
💸 What’s the Current Rule?
Right now, when you sell your primary residence, you can exclude:
$250,000 in profit if you’re single
$500,000 if you’re married and filing jointly
(Source: IRS Publication 523)
Sounds pretty generous—until you look at how much home values have gone up since 1997. A lot of long-time homeowners now easily exceed those limits, especially in higher-cost markets.
🧠 Why It Matters
If you’ve lived in your home for a while and built up equity (which is the whole point, right?), you might owe capital gains tax on the appreciation above those limits when you sell. That can make people hesitate to move—whether they’re downsizing, relocating, or just ready for a change.
And when they don’t move? Fewer homes hit the market, which means less inventory for buyers, higher prices, and a tighter squeeze for everyone.
✅ The Upside of Updating the Rule
Gives longtime homeowners flexibility to move without a surprise tax bill
Could help unlock inventory, especially starter and move-up homes
Makes the law match today’s market, not the pre-Zillow era
Encourages healthy turnover, which benefits buyers and sellers alike
(Source: National Association of REALTORS® Capital Gains Study)
⚠️ But Let’s Keep It Real—There Are Some Cons
Reducing taxable gains means less revenue for federal programs
Most helpful in higher-priced markets, may not impact all sellers
Could potentially drive up demand, if more buyers jump in
Not everyone hits the cap—many homeowners still fall within the current exclusion
📜 What’s Being Proposed?
There’s a bipartisan bill in Congress called the More Homes on the Market Act. It would:
Raise the capital gains exclusion to $500,000 for individuals and $1 million for couples
Adjust the limits annually for inflation
Make it easier for longtime owners to sell without facing big tax consequences
(Source: Congress.gov – H.R.1321)
It’s not a done deal, but it’s a conversation worth watching—especially if you’re sitting on a lot of equity.
📈 Bottom Line
I’m not here to push policy—I’m here to help you understand how changes like this could affect you, your family, and your future. Equity should be a blessing, not a burden.
If you’re curious how your home stacks up—or if selling might trigger a capital gains hit—let’s run the numbers. No pressure, just planning.
Real estate isn’t one-size-fits-all. Let’s find the strategy that fits your life. 💬
