CORREA, COLLEAGUES INTRODUCE BIPARTISAN LEGISLATION TO ADDRESS HOUSING AFFORDABILITY
SANTA ANA, Calif. — Today, Representative Lou Correa (CA-46), alongside Representatives Jimmy Panetta (CA-19), Mike Kelly (PA-16), Nicole Malliotakis (NY-11), Suzan DelBene (WA-01), and Rudy Yakym (IN-02), introduced reintroduced the bipartisan More Homes on the Market Act to make housing more available and affordable for Americans. This legislation would update the tax code to incentivize homeowners to sell their properties, increasing the housing supply and alleviating affordability challenges in communities across the country.
“Hard-working American taxpayers on Main Street—especially our seniors—shouldn’t have to pick between downsizing their homes and having to foot an enormous capital gains tax bill,” said Rep. Correa. “This common-sense, bipartisan legislation will ensure that American who choose to downsize their homes don’t face an unnecessary tax burden—and make more homes more affordable for even more hard-working families here in Orange County and across the country.”
The bill would raise the capital gains tax exclusion on the sale of a primary residence from $250,000 to $500,000 for single filers and from $500,000 to $1 million for joint filers. These thresholds, originally set in 1997, have never been adjusted for inflation, making it increasingly difficult for homeowners, especially seniors and middle-class families, to sell without facing significant tax burdens.
“As home prices rise and tax exemptions stay the same, homeowners feel financially locked into their homes and homebuyers feel locked out of the housing market,” said Rep. Panetta. “By modernizing the capital gains exclusion, our bipartisan More Homes on the Market Act will enable more people to sell their homes, downsize if they choose, and retain the savings they’ve built over a lifetime. This commonsense fix will expand housing inventory, ease affordability challenges, and help more families achieve the dream of homeownership.”
“As housing prices have increased, people who have chosen to downsize have been unfairly punished with massive tax burdens,” said Rep. Kelly. “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.”
Housing experts point to the outdated capital gains tax exclusion as a major contributor to the nation’s tight housing market. In 2023, a report found 8% of U.S. home sellers made more than $500,000 in profit on their home sale, compared to just 1.3% in 2003. If the exclusion had been indexed to inflation, it would stand at approximately $500,000 for single filers and $1 million for joint filers today.
“I am proud to join my colleagues in introducing the bipartisan More Homes on the Market Act,” said Rep. Malliotakis. “As a member of the House Ways & Means Committee, I am committed to advancing legislation that reduces the tax burden on Americans. This bill will protect middle-class families from a large tax bill on capital gains when selling their primary residence, ensuring they can keep more of their hard-earned money and save for the future.”
“I regularly hear from people in my district and across the country who want to sell their homes but can’t afford to because of the significant tax bill they will incur. This means fewer homes on the market, which pushes home prices higher and puts homeownership out of reach for too many Americans,” said Rep. DelBene. “This legislation would provide meaningful tax relief by doubling the capital gains tax exclusion, allowing homeowners to keep more of their investment. This will decrease pressure on the housing market nationwide and help address affordability issues.”
“Amid rising housing prices and inflation, Americans that have opted to downsize have faced unfair tax burdens,” said Rep. Yakym. “I am pleased to co-lead this legislation which provides meaningful tax relief for seniors and others looking to downsize by doubling the capital gains tax exclusion for the sale of a principal residence. Hardworking Americans deserve to be able to save their resources as they simplify their lives.”
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