Trump Is Considering “No Tax on Capital Gains” for Home Sales — But It Might Just Be Another Gift to the Wealthy

Trump’s latest tax proposal of “no tax on capital gains” sounds great on paper — who doesn’t want to keep more money from their home sale? But here’s the catch: while this sounds like a win, eliminating capital gains taxes on home sales would primarily benefit affluent and older homeowners, not the average American struggling to afford their first house.

• Currently, sellers can exclude up to $250K ($500K for couples) in home sale gains, but those caps haven’t increased since 1997 — even as home prices have climbed nearly 190% since then.
• In high-cost states like California, nearly 30% of home sales exceed $500K in gains, making the tax cut a disproportionately big win for wealthy markets where properties routinely sell for millions.

What’s the big deal? Around 34% of individual homeowners could exceed the current exemption threshold, but those affected are typically longtime property owners in pricey markets like Massachusetts and Washington who’ve built up equity over decades. The National Association of Realtors has long supported reform, arguing that the current limits discourage older homeowners from downsizing or relocating. While most sellers can reduce their taxable gains by adding renovation costs to their home’s original price, today’s 6.7% mortgage rates and record-high home prices mean the tax cut is unlikely to meaningfully improve housing affordability for the average American.