Former President Donald Trump recently threw his support behind the “No Tax on Home Sales Act”, a legislative proposal to eliminate federal capital gains taxes on the sale of primary residences. This proposal, spearheaded by Rep. Marjorie Taylor Greene, follows growing concern over how outdated tax rules may be hindering housing mobility and affordability.
Origin of the Bill
Introduced by Congresswoman Greene, the “No Tax on Home Sales Act” would abolish all federal capital gains taxes on profits from selling a primary residence. Currently, homeowners may exclude up to $250,000 of gain ($500,000 for married couples), but these limits haven’t changed since 1997, even as home prices nationwide have soared.
According to Greene, the bill aims to remove the “unfair burden” that stops many older or longer-term homeowners from selling. With more Americans exceeding those exclusion thresholds, the current rules trap existing homeowners and limit housing supply.
Trump’s Endorsement
In a July 2025 press exchange, Trump confirmed that his administration is “considering eliminating capital gains tax on home sales” to fuel housing market growth. He added that reducing interest rates could also help, but the exclusion remained on the table.
His remarks spurred Greene to publicly thank him, interpreting his comments as a tacit endorsement of her legislation. She urged Congress to pass the bill to free up housing inventory and relieve the homeowner burden.
Why the Rule Needs Updating
Under current law, roughly 34% of U.S. homeowners, nearly 29 million, would owe capital gains tax beyond the $250,000/$500,000 thresholds if they sold their homes.
That percentage is expected to grow to more than 56% by 2030 if home values continue rising faster than exemption caps. This unfortunate mismatch is widely referred to as the “stay‑put penalty”, owners may choose not to sell due to expected tax liability.
Proposed Benefits
Unlocking Housing Inventory
By removing this tax obstacle, long-time homeowners, especially older Americans, may feel empowered to downsize or relocate, releasing larger homes to the market.
Boosting Market Mobility
Many retirees and empty nesters have delayed relocation because moving would mean losing a large portion of their home equity to taxes. This change would give them an exit pathway without penalty.
Economic Stimulus
Greene and supporters argue the increased turnover could spark activity in housing markets, helping first-time buyers and adding momentum to local economies.
Critics’ Concerns
Disproportionate Benefit to Wealthier Sellers
Many experts warn that the policy would primarily help affluent homeowners with substantial equity, while doing little for average earners who sell at smaller gains.
Revenue Loss
Eliminating capital gains taxation on home sales could cost the federal government hundreds of billions in revenue. Critics worry this loss would be offset by cuts elsewhere or higher deficits.
Market Distortion Risk
Without limits, this could incentivize speculative housing purchases and turn owner-occupied homes into tax shelters, potentially pushing prices higher.
What If It Passes?
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Homeowners in high-value metro areas (think California, New York, and Massachusetts) could save tens or hundreds of thousands in taxes. Recent analysis highlights California as the biggest potential beneficiary.
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Baby Boomers and retirees could finally downsize without penalty, tapping into equity to fund retirement or move closer to family.
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First-time buyers may benefit indirectly if increased listings ease inventory shortages in high-demand markets. Still, critics caution that without broader housing supply reforms, affordability won’t follow automatically.
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Investors should note that the bill applies only to primary residences, not second homes, flips, or rental properties.
Legislative Outlook
The bill’s fate is uncertain in Congress. While Greene’s proposal has gained headlines, and Trump’s remarks add weight, many lawmakers are skeptical. The broader “One Big Beautiful Bill” passed in July 2025 made other tax cuts permanent but did not touch capital gains on home sales.
The proposal may gain traction as part of bipartisan housing legislation addressing affordability, zoning reform, and tax incentives, but success will depend on political will.
Bigger Policy Picture
Eliminating capital gains tax on home sales is part of a broader debate about housing affordability and mobility in the U.S. Critics say that unless paired with supply-side reforms, such as zoning loosening and construction incentives, the measure won’t solve the core crisis.
At the same time, the proposal highlights growing urgency to address outdated tax code provisions that penalize mobility and equity-building. Many housing experts argue that any change should be part of balanced reforms that align supply, demand, and tax fairness.
Final Thoughts
Trump’s endorsement of the No Tax on Home Sales Act signals rising momentum for a policy aimed at removing financial barriers for long-time homeowners and older Americans. While the legislation could unlock housing supply and ease mobility, it also raises legitimate concerns over fairness, revenue impact, and unintended market distortions.
Ultimately, the bill’s success, or failure, may hinge on how strongly it is integrated with broader efforts to address housing supply, affordability, and fairness across demographic and income groups.
Whether you’re a homeowner considering a move, a policymaker grappling with housing equity, or an investor watching real estate dynamics, this proposal adds a compelling new chapter to today’s housing policy conversation.
