Sponsors (13)
Allows sellers age 65+ to exclude gain on home sales to certified first-time buyers (sale price ≤ $500,000) for sales after 12/31/2026 through 12/31/2031.
The bill gives older sellers a targeted tax break to encourage sales to verified first-time buyers and expand first-time buyer access, at the cost of reduced federal revenue, narrower/temporary eligibility with cliff risks, and added legal/compliance burdens for buyers.
Seniors (age 65+) who sell a home to a verified first-time buyer can exclude federal tax on gain up to a $500,000 sale price, letting them keep more proceeds at sale.
First-time homebuyers gain easier access to market inventory because sellers may be incentivized to sell to verified first-time buyers, improving purchase opportunities for young adults and middle-class families.
Transactions qualifying for the exclusion are narrowly targeted to the public-policy goal of promoting homeownership among people who have never owned a principal residence, aligning a tax incentive with that policy objective.
Taxpayers/federal budget: The exclusion reduces federal tax revenue by removing taxable gains up to $500,000, which could increase deficits or require spending cuts or tax offsets elsewhere.
Buyers (first-time): Requiring a sworn perjury statement to certify first-time status exposes buyers to criminal penalties for false certifications and increases compliance burdens on buyers and closing agents.
Sellers near thresholds: The $500,000 sale-price cap and the statutory sunset (end 2031) limit who benefits and can create cliff effects for sellers close to price or timing cutoffs, complicating planning and reducing predictability.
Based on analysis of 2 sections of legislative text.
Official title: To amend the Internal Revenue Code of 1986 to exclude from gross income gains on the sale of real property to first-time homebuyers by individuals who have attained age 65.
Introduced January 14, 2026 by John J. McGuire · Last progress January 14, 2026
Creates a temporary tax exclusion that lets sellers age 65 or older exclude gain on the sale of a home when the buyer is a first-time homebuyer who will use the property as their principal residence. The exclusion applies to qualifying sales up to $500,000, displaces the existing principal-residence exclusion for those sales, and is effective for sales after December 31, 2026 through December 31, 2031.