To address ongoing housing affordability issues across the country, a bipartisan bill unveiled on March 1 by U.S. Rep. Mike Kelly (R-PA) would incentivize more American homeowners to sell their houses to increase the market supply.
“As housing prices have increased, people who have chosen to downsize have been unfairly punished with massive tax burdens,” said Rep. Kelly, chairman of the House Ways & Means Committee’s Subcommittee on Tax. “After years of making improvements and investments into their homes, which is the largest purchase for most Americans, homeowners deserve to keep more of their hard-earned money during their golden years.”
The More Homes on the Market Act, H.R. 1321, which is sponsored by U.S. Rep. Jimmy Panetta (D-CA), would increase the sales gain tax exclusion to $500,000 for single filers and $1 million for joint filers, according to a bill summary provided by Rep. Kelly’s staff.
Currently, homeowners who sell their home may exclude $250,000 in gains from capital gains taxes, or $500,000 in the case of a joint-filing couple, an amount set in 1997 and not indexed for inflation, the summary says.
H.R. 1321 would help remedy that problem by increasing the sales gain exclusion, said Rep. Panetta. “Such a simple fix would allow homeowners to downsize, sell their homes, and keep their nest egg intact,” he said.
The National Association of Realtors endorsed H.R. 1321, which is under consideration in the U.S. House Ways and Means Committee.