President Donald Trump this week floated the prospect of ending capital gains tax on home sales, he told reporters on Tuesday.
Trump made the remark while take questions during a meeting with Philippines President Ferdinand “Bongbong” Marcos Jr. A reporter mentioned that there is now no tax on tips and overtime and asked, “How important is that we have no tax on home sales, capital gains, to unleash the housing market?”
“Well, we’re thinking about that,” Trump responded. “But would also unleash you just by lowering the interest rates. If the fed would lower the rates, we wouldn’t even have to do that.”
However, Trump repeated that they are “thinking about — no tax on capital gains on houses.”
Rep. Marjorie Taylor Greene (R-GA) quickly praised Trump’s remarks, mentioning her bill, the No Tax on Home Sales Act, which she introduced July 10. According to a press release, her 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.
Her press release adds that the IRS currently allows an exclusion “of up to $250,000 ($500,000 for joint filers) in capital gains from home sales,” noting that “those limits haven’t been updated since 1997.”
“Thank you, President Trump, for supporting my No Tax on Home Sales Act!” Greene said. “My bill would ELIMINATE the federal capital gains tax on the sale of your primary residence. You worked for it. You should keep it. Let’s get this bill passed!”
CNN explained that, currently, if one sells their home “within a year of buying it, any capital gains will be considered short-term and you will have to pay ordinary income tax on all your gains.”
But if you have lived in it as your primary residence for at least 24 months (consecutively or not) in the previous five years before you sell it, you may be allowed to exempt from the capital gains tax the first $250,000 of your gains if you’re single or $500,000 if you’re married filing jointly
Any gains above those thresholds are subject to the long-term capital gains tax. But just how much you’ll pay is based on your income…
Notably, Greene’s legislation specifically applies to individuals selling their primary residence — not individuals who flip homes for resale. The bill’s text can be found here.
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