Sponsors (7)
The bill makes it easier and more lucrative for people selling primary homes by expanding and simplifying the home‑sale gain exclusion, but it reduces federal revenue and concentrates most benefits among wealthier homeowners.
Homeowners who sell their primary residence can exclude a much larger (potentially unlimited) amount of capital gain from taxable income, lowering or eliminating tax on home-sale gains for those sellers.
Taxpayers selling homes face simpler, clearer tax rules because dollar caps are removed and the two‑year ownership/use test in §121(c)(1) is clarified, reducing ambiguity and compliance costs.
Removing or substantially raising the exclusion cap will reduce federal income tax revenue, which could increase pressure for spending cuts, higher taxes elsewhere, or larger deficits.
The largest benefits will flow to high‑income homeowners and owners of very expensive homes, making the change regressive compared with other forms of tax relief.
Based on analysis of 2 sections of legislative text.
Removes the dollar limits on the federal tax exclusion for gain from the sale of a primary residence, while keeping ownership/use and timing rules.
Introduced January 13, 2026 by Craig A. Goldman · Last progress January 13, 2026
Removes the dollar limits on the federal tax exclusion for gain from the sale of a primary home, so qualifying sellers can exclude more (potentially all) capital gain provided they meet the ownership/use and timing rules. The rule change keeps the basic ownership-and-use requirements and the two‑year timing constraint for repeated use, and it applies to sales and exchanges after the law goes into effect.