The Trump administration is reportedly looking at updating rules and limits around the capital gains tax limitations on home sales—a longstanding issue in real estate.
On Fox Business recently, host and former National Economic Council director Larry Kudlow said he had spoken to President Trump about potential changes to capital gains taxes on home sales in order to “shield” homeowner’s profits, which he said Trump was “very interested” in. Namely, changes would include indexing capital gains to inflation, and updating the current limit on the capital gains tax exclusion.
Currently, homeowners are able to exclude up to $250,000 in gains ($500,000 for married couples). This limit has remained unchanged since 1997, in which time Realtor.com® data found that home values have climbed over 260%.
The same report found that 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.
Current National Economic Council director Kevin Hassett affirmed in the conversation with Kudlow that the administration is looking at proposing new tax breaks in advance of midterm elections.
CNBC reported that experts said Congressional action would be required for such changes, so passage before midterm elections is “unlikely,” and that a White House spokesperson said any substantial policy updates would come “directly” from the administration.
This is the latest in a string of recent governmental proposals to revise the capital gains tax.
Back in January, Representative Craig Goldman (R-TX) proposed the Don’t Tax the American Dream Act, which would allow homeowners who’ve lived in a property for at least two years to be outright exempt from capital gains taxes after selling their home.
Prior to that, Representative Marjorie Taylor Greene (R-GA) proposed the No Tax on Home Sales Act in July of 2025, intended to eliminate capital gains taxes on the sale of primary residences. Shortly after Greene’s proposal, President Trump publicly suggested that, “We are thinking about no tax on capital gains on houses.”
Additionally, back in February 2025 Representative Jimmy Panetta (D-CA) proposed the More Homes on the Market Act to expand the limit to $500,000 for singles and $1,000,000 for couples, with the intention to continue adjusting the limit for inflation.
All three proposed acts currently still remain in the House Committee on Ways and Means.
Many in the industry have championed revisions to the capital gains tax in recent years, believing that adjusting the legislation could assist affordability and help to alleviate the lock-in effect.
The National Association of Realtors® (NAR) is one such champion, as NAR Director of Federal Taxation Evan Liddiard said previously that 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.
Steve and Hans Wydler—associate brokers and luxury real estate agents with Compass—also said in an op-ed back at the time of Goldman’s proposal that “taxes and regulations inevitably shape behavior, but when they discourage economically productive activity (in this case, housing mobility) they warrant reconsideration.”
“Markets function best when policy minimizes unintended distortions rather than creates them,” they continued. “Here, a well-intentioned tax provision has evolved into a structural drag on housing supply at a moment when mobility is essential for labor markets, family formation, and economic growth. If tax law already forgives gains at death, it should not punish homeowners who choose to move while alive.”
