More Homes on the Market Act
Key claim: The More Homes on the Market Act would double the federal capital gains exclusion on principal residence sales to $500,000 for individuals and $1 million for joint filers, with annual inflation adjustments.
Abstract
(HR1340 · 119th Congress) More Homes on the Market Act This bill increases the amount of gain from the sale of a principal residence that an individual may exclude from gross income (for federal tax purposes). Under the bill, an individual may exclude from gross income gain from the sale of a principal residence of up to $500,000 (currently $250,000), and taxpayers who are married and file a joint federal income tax return may exclude up to $1 million (currently $500.000). The bill also requires these amounts to be adjusted annually for inflation. Latest action (2025-02-13): Referred to the House Committee on Ways and Means.
Why this matters
The §121 capital gains exclusion has not been adjusted since 1997, and in higher-cost markets accumulated appreciation now regularly exceeds current thresholds, which some analysts argue discourages downsizing and constrains resale inventory. Doubling and indexing the exclusion would primarily benefit long-tenured owners at sale, with second-order effects for buyers if listings expand and ambiguous effects for renters and builders. Neutral framing: the bill is a tax-side lever on existing-home turnover rather than a new-construction or affordability program.