Sponsors (26)
The bill raises and indexes the home‑sale capital gain exclusion to give homeowners (especially middle‑class and senior sellers) meaningful tax relief, at the cost of reduced federal revenue, potential distributional skew toward wealthier sellers, and some administrative transition complexity.
Homeowners — especially middle‑class families and long‑time owners/seniors — can exclude up to $500,000 (individual)/$1,000,000 (married) of capital gain on a home sale, directly lowering taxable income and reducing tax bills.
Homeowners and taxpayers benefit from indexing the exclusion for inflation, which preserves the exclusion's real value over time and prevents erosion from rising home prices and general inflation.
Taxpayers and the federal budget — larger exclusions will reduce taxable income collected by the federal government, modestly lowering revenue and potentially increasing deficits or reducing funds available for other programs.
Renters and first‑time buyers — the larger, inflation‑indexed exclusions disproportionately benefit homeowners with large home‑price appreciation and can favor wealthier sellers over renters and new entrants into housing.
Taxpayers and the IRS — limiting the change to sales after enactment delays benefits for prior sales and could create transition and compliance complexity for taxpayers and IRS administration.
Based on analysis of 2 sections of legislative text.
Doubles the principal residence gain exclusion to $500K/$1M and indexes those amounts for inflation beginning after 2025.
Official title: Amend the Internal Revenue Code of 1986 to increase the exclusion of gain from the sale of a principal residence, and for other purposes.
Introduced December 3, 2025 by John Cornyn · Last progress December 3, 2025
Increases the amount of profit a homeowner can exclude from federal income tax when selling a primary residence from $250,000/$500,000 to $500,000/$1,000,000 and requires those amounts be indexed for inflation. The change applies to taxable years beginning after 2025 and to sales and exchanges after the bill is enacted. This amendment to the Internal Revenue Code simply raises the exclusion thresholds and adds an automatic cost‑of‑living adjustment; it does not create new programs, spending, or administrative mandates for states or localities.