More Homes on the Market Act
Summary
S. 3332 would amend the tax code to increase the amount of profit homeowners can exclude from capital gains taxes when selling their primary residence. Currently, individual homeowners can exclude $250,000 in gains and married couples can exclude $500,000, limits that were set in 1997 and have never been adjusted for inflation. This bill would raise those thresholds to $500,000 for individuals and $1,000,000 for married couples, with future adjustments for inflation beginning in 2026.
Proponents argue this change would encourage more homeowners to sell their properties by reducing the tax burden they face, thereby increasing the supply of homes available on the market. They contend that without this adjustment, the fixed 1997 limits have effectively lost half their value due to inflation, making it financially difficult for some homeowners—particularly older residents wanting to downsize—to sell without facing substantial tax bills. The bill is currently under consideration by the Senate Finance Committee and has not yet been voted on by the full Senate.