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Bipartisan push to eliminate capital gains tax on home sales

Older homeowners may soon get relief as politicians discuss tax changes to boost housing market.

July 27, 2025 at 07:31 AM

Boomers Weigh in on Eliminating the Capital Gains Tax on Home Sales

As politicians discuss changing home sale tax rules, many older homeowners feel stuck in large houses.

Boomers Consider Impact of Potential Capital Gains Tax Elimination

Many older homeowners are hesitant to sell their large properties due to significant capital gains taxes. This has contributed to a shortage in family-sized homes on the market, especially in states like California. Under current laws, profits exceeding $500,000 for married couples face a hefty tax, leading retirees to postpone downsizing. A recent bipartisan push echoes President Trump's comments about potentially eliminating this tax to stimulate the housing market. However, economists warn that while this may increase sales, it might not solve the broader housing shortage. Older sellers still need new homes, and eliminating the tax may skew benefits towards wealthier individuals.

Key Takeaways

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Older homeowners are delaying sales due to high capital gains taxes.

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Nearly one-third of homeowners could face tax issues on profits.

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A bipartisan effort seeks to eliminate or adjust capital gains taxes.

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Eliminating this tax could shift asset values among retirees.

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Experts warn about unintended consequences for the housing market.

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The current housing shortage requires holistic solutions beyond tax reform.

"There are a million reasons why we’d like to move, but we’re not because the tax is just burdensome."

Joel Friedman highlights the tax burden that prevents seniors from selling their homes.

"I don’t think you want a bunch of 75-year-olds occupying six-bedroom houses."

Mary Ellen Taylor criticizes the current tax structure that discourages downsizing among older homeowners.

"We’re still stuck with this problem of lack of housing in the US."

Selma Hepp emphasizes the ongoing housing shortage despite potential tax relief for sellers.

"The way the law stands today, we're staying put in a home bigger than we need."

David Levin shares his frustration over staying in a large home due to capital gains tax.

The discussion around eliminating the capital gains tax on home sales reveals a deeper challenge in the housing market. While the intent is to encourage older homeowners to sell and thus increase housing availability, there are potential unintended consequences. The luxury of tax relief may further propagate wealth disparity, benefiting higher-income retirees while not successfully addressing the root issues of housing shortages. A reform requires careful consideration of its wider economic impacts, ensuring that it serves to strengthen supply rather than exacerbate demand.

Highlights

It's burdensome to stay in a home bigger than we need.
A tax change could push older homeowners to finally sell.
The housing crisis won't end with just tax reforms.
Without a clear plan, we're stuck with this housing shortage.

Potential Risks of Capital Gains Tax Elimination

Eliminating the capital gains tax could significantly reduce federal revenue and disproportionately benefit wealthier homeowners, potentially increasing housing inequality and complicating the ongoing housing crisis.

Future discussions on tax reform must balance homeowner relief with equity.

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capitalgains realestate homeowners housingmarket taxreform politics economy housing

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