Sponsors (9)
The bill gives many homeowners—especially middle‑class sellers and seniors—substantial, inflation‑protected tax relief on home‑sale gains, at the cost of reduced federal revenue, distributional bias toward owners over renters, and some administrative transition complexity.
Homeowners can exclude up to $500,000/$1,000,000 of capital gain when they sell a home, directly reducing taxable income and lowering tax bills for sellers.
Middle‑class families and seniors (especially those selling long‑owned homes) receive larger tax protection from home‑sale gains, helping them keep more proceeds from a sale.
Homeowners and other taxpayers benefit from indexing the exclusion for inflation, which preserves the exclusion's real value over time and prevents erosion from rising prices or inflation.
Taxpayers and the federal budget face lower revenue because larger exclusions reduce taxable gains collected by the government, which could modestly increase deficits or require cuts/offsets to other programs.
Renters and first‑time buyers may be disadvantaged because the benefits primarily accrue to homeowners—particularly those with large home‑price appreciation—potentially favoring wealthier sellers over non‑owners.
Taxpayers, tax preparers, and the IRS face transition and compliance complexity because the change applies only to sales after enactment, delaying relief for past sales and creating administrative work to implement the new rules.
Based on analysis of 2 sections of legislative text.
Doubles the capital‑gain exclusion on sale of a primary residence to $500,000 (single) and $1,000,000 (joint) and indexes those amounts for inflation.
Increases the tax exclusion for gain on the sale of a primary residence from $250,000/$500,000 to $500,000/$1,000,000 and adds an inflation adjustment so those amounts rise over time. The change takes effect for taxable years beginning after 2025 and applies to sales and exchanges after enactment. The bill leaves existing eligibility rules (like the ownership and use tests) in place and does not create new programs or spending; it simply raises and indexes the dollar limits used to determine how much gain a homeowner can exclude from taxable income.
Introduced December 3, 2025 by John Cornyn · Last progress December 3, 2025