Legislators Seek to Double Capital Gains Exclusion for Sellers
Originally published on May 25, 2023 by Aarthi Swaminathan for MarketWatch.com.
Homeowners are sitting on ultra-low mortgages, refusing to sell and deal with higher mortgage rates and few home listings to choose from. One Congressman says the solution is in D.C.’s hands.
California Representative Jimmy Panetta, a Democrat, whose district has some of the most expensive housing markets in the U.S., in March introduced legislation with Republican Congressman Mike Kelly from Pennsylvania that doubles the amount of money homeowners can exclude from declaring on their taxes when they make a profit on the sale of their home.
Under the “More Homes on the Market Act,” when a homeowner sells their home, they will be able to exclude $500,000 for single filers and $1 million for joint files when they file their taxes. It would also be indexed to inflation moving forward.
Currently, the legislation only allows for single filers to exclude $250,000 in gains and $500,000 for joint filers. The amount, set in 1997, has not changed in 26 years.
“It’s a pretty simple fix and a pretty straightforward bill,” Panetta told MarketWatch in an interview.