U.S. President Donald Trump meets with Philippine President Ferdinand Marcos Jr. (not pictured), within the Oval Workplace on the White Home in Washington, D.C., U.S., July 22, 2025.
Kent Nishimura | Reuters
President Donald Trump stated the administration is contemplating ending capital features taxes on dwelling gross sales to spice up the housing market.
When requested in regards to the concept within the Oval Workplace on Tuesday, Trump advised reporters, “we’re fascinated about that.”
“If the Fed would decrease the [interest] charges, we would not even have to try this,” he stated. “However we’re fascinated about no tax on capital features on homes.”
Underneath present legislation, dwelling sellers can face capital features taxes as soon as income exceed $250,000 for single filers or $500,000 for married {couples} submitting collectively.
Extra from Private Finance:
Trump’s ‘massive stunning invoice’ created a brand new scholar mortgage plan: What to know
Reasonably priced Care Act well being plan enrollees may face ‘subsidy cliff’ in 2026
Trump’s ‘massive stunning invoice’ consists of these 2025 tax adjustments
Trump’s feedback come roughly two weeks after Rep. Marjorie Taylor Greene, R-Ga., launched the No Tax on House Gross sales Act, to get rid of capital features taxes on major dwelling gross sales.
“Owners who’ve lived of their properties for many years, particularly seniors in locations the place values have surged, should not be compelled to remain put due to an IRS penalty,” she stated in an announcement. “My invoice unlocks that fairness, helps repair the housing scarcity, and helps long-term monetary safety for American households.”
Nevertheless, the proposal might be pricey, and it is unclear whether or not the measure has broad congressional help, consultants say.
“I feel this might generate some curiosity, however they’re extra prone to elevate the exemption than they’re to get rid of the tax solely,” Howard Gleckman, senior fellow on the City-Brookings Tax Coverage Middle, advised CNBC.
Who pays capital features on dwelling gross sales
Enacted in 1997, the $250,000 and $500,000 capital features exclusions — which apply to major dwelling gross sales — have by no means been listed for inflation.
Since 1997, the median dwelling gross sales value has climbed by almost 190%, from about $145,000 to roughly $417,000, as of the primary quarter of 2025, based on Federal Reserve knowledge.
As dwelling values rise, sure people, corresponding to longtime owners, usually tend to exceed the $250,000 and $500,000 thresholds, which may set off capital features taxes, consultants say.
When dwelling gross sales income exceed $250,000 or $500,000, capital features are levied at 0%, 15% or 20%, relying on taxable earnings. Extra revenue above these thresholds may set off the so-called internet funding earnings tax of three.8%, relying on different funding earnings, based on the IRS.
Some 29 million owners (34%) may exceed the $250,000 threshold for single filers, and eight million (10%) might be above the $500,000 restrict for married {couples} submitting collectively, based on a 2025 examine from the Nationwide Affiliation of Realtors, or NAR. The group has lengthy advocated for capital features reform for dwelling gross sales.
Owners in states like Washington, California, Utah and Massachusetts are extra prone to be impacted, based on NAR knowledge.
Nevertheless, many householders do not realize it is doable to cut back your house gross sales revenue by including so-called capital enhancements, corresponding to dwelling renovations to the unique buy value, consultants say.
If capital features taxes for dwelling gross sales have been eradicated, the measure would primarily profit sellers who’re older and wealthier, based on an evaluation launched Tuesday from The Funds Lab at Yale College.