Most homeowners get a large tax break when they sell their homes. But newly proposed legislation would make some future sales even more lucrative.
The No Tax on Home Sales Act, introduced in the House of Representatives in July, would eliminate federal capital gains taxes on profits from the sale of primary homes.
Capital gains taxes are a form of income tax that typically apply to profits made by selling capital assets, such as real estate and stocks.
Currently, the capital gains tax break is limited to $250,000 for single taxpayers and $500,000 for married couples who file a joint tax return.
This means, for example, that a single person who bought a home for $200,000 and sold it years later for $600,000 would owe taxes on part of the $400,000 profit. Specifically, the seller would owe taxes on $150,000 of the profit, as only the first $250,000 would be tax-free.
If the No Tax on Home Sales Act became law, however, all $400,000 of the seller’s profit would be tax-free.
The brief bill would simply repeal the current limits of $250,000 and $500,000, thereby making all profit from the sale of a primary home tax-free — assuming the seller is otherwise eligible for this tax break.
The bill would not change the eligibility criteria for the tax break. So, as is the case under current law:
- The tax break would still be limited to the sale of primary residences.
- To qualify for the tax break, you would still have to have lived in the home for a total of at least two years during the five years prior to selling.
- You still would not be allowed to take advantage of this tax break more than once in a two-year period.
Rep. Marjorie Taylor Greene (R-Ga.), who introduced the bill, says eliminating all federal capital gains taxes on home sales would encourage more people to sell their homes, which would boost the number of available homes. This increase in inventory would in turn help lower prices for first-time homebuyers, Greene says.
She also notes that the new bill would help homeowners hold on to more of their gains if they downsize.
In an announcement about the bill, Greene says:
“Homeowners who have lived in their homes for decades, especially seniors in places where values have surged, shouldn’t be forced to stay put because of an IRS penalty. My bill unlocks that equity, helps fix the housing shortage, and supports long-term financial security for American families.”
To learn about other tax breaks available to homeowners, check out “9 Federal Tax Breaks for Homeowners in 2025 — and How Much They’re Worth.”
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