Capital gains taxes—the tax on profits received from the sale of an asset like a home—are one of the biggest costs to homesellers, especially more and more those who exceed the IRS exclusions in the wake of today’s rising home prices. One congressman is hoping to change that. A new bill, the “Don’t Tax the American Dream Act,” introduced on Tuesday, January 13, by Representative Craig Goldman (R-TX) would outright eliminate capital gains taxes for many homesellers.
Under current tax policy, single homeowners who have lived in a primary residence for at least two years can exclude $250,000 of profit from their capital gains taxes on a home sale, while a married couple can exclude $500,000. Goldman’s bill revises this so that homeowners who’ve lived in a property for at least two years are outright exempt from capital gains taxes after selling their home.
“Repealing these taxes will unleash the housing market and help restore the American Dream of homeownership,” said Goldman in a press release, which cites that the exemption caps on capital gains taxes for home sales haven’t been updated to account for rising home sales since 1997, and this is costing homeowners.
According to findings by Realtor.com®, home values have climbed over 260% since the capital gains tax exemptions for homes were last adjusted. As of 2025, 34% of homeowners exceed the single-filer limit, and by 2030 this could reach 56%, meaning a majority of homeowners would not be able to move without a tax disincentive.
While Goldman’s bill currently has no cosponsors, it is just one example of sentiment for capital gains tax reform that has been gaining ground. In February 2025, Representative Jimmy Panetta (D-CA) introduced a capital gains tax reform bill that would double the exemptions for home transactions then index them for inflation from there on out. Representative Marjorie Taylor-Greene (R-GA) later introduced in July a bill to eliminate capital gains taxes for home sales. Shortly thereafter, President Donald Trump publicly suggested that, “We are thinking about no tax on capital gains on houses.”
According to NAR Director of Federal Taxation Evan Liddiard, the association believes that lowering capital gains tax burdens would boost the real estate resale market, though the exact effects would of course vary across local markets. While forecasting the subsequent impact on home prices is a “tougher question,” Realtor.com argues that alleviating the lock-in effect of capital gains taxes could offer market relief.
“Even a modest shift in supply can change pricing behavior fast,” wrote Realtor.com’s Allaire Conte. “Better yet, the price impact likely wouldn’t look like a dramatic national collapse. Instead, it would show up in what buyers actually feel: More negotiating power, fewer bidding wars and more listings sitting long enough to invite price cuts.”
