An Outdated Tax Law Is Keeping Homes Off the Market
Congress hasn't updated the home sale tax exclusion since 1997. Home prices have risen 264% since then, and it's affecting homeowners and buyers at every stage of life.
The Problem
When you sell your home, federal law lets you avoid paying taxes on up to $250,000 of the profit from the sale, or up to $500,000 if you're married.
Those limits haven't changed since 1997. Since then, home prices have risen by more than 264%.
That means more homeowners now face a potential tax bill when they sell. Some delay a move, pass up a job opportunity, or stay in a home that no longer fits their needs.
When people can't or won't sell, it means fewer homes for individuals or families looking to buy.
Nearly 29 million homeowners could face federal capital gains taxes if they sold today. More than 13 million households are already staying put because of the potential tax consequences.
Modernizing this outdated policy would help homeowners move when they're ready and give more buyers a chance to find a home.
The Fix
Congress can catch up to today’s reality by doubling the limits and indexing them to inflation.
That's it.
This isn't a new tax break. It's a long-overdue update to a policy that hasn't kept pace with today's housing market. More homeowners would be able to sell when they're ready, giving buyers more homes to choose from.
Americans Agree
7 in 10 voters say the current system is broken.
More than 8 in 10 support updating the exclusion to reflect today's housing market, including strong majorities of Democrats, Republicans, and Independents.
It's a practical solution that would help more homes come onto the market.