Congress·In Committee·H.R. 1340

Congress proposes bigger tax-free home sale profits to encourage more homes to be listed

More Homes on the Market Act

about 1 year ago·View on Congress.gov

Part of: Congress Moves to Double Home Sale Tax Exclusions to $500K and $1M

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Stalled

No legislative action in over 90 days.

Legislative Progress

House

Senate

President

Law

Key Points

Congress would double the tax-free profit limit when you sell your main home: from $250,000 to $500,000 for most single filers.
From policy text
“by striking ``$250,000'' and inserting ``$500,000'' each place it appears,”
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For married couples filing jointly, it would double from $500,000 to $1,000,000 in tax-free profit on the sale of a main home.
From policy text
“by striking ``500,000'' and inserting ``$1,000,000'' each place it appears,”
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Starting after 2024, these dollar limits would rise over time with inflation, so the tax break wouldn’t shrink in value.
From policy text
“In the case of a taxable year beginning after 2024, the $500,000 and $1,000,000 amounts in paragraphs (1), (2), and (4) shall be increased by an amount equal to-- ``(A) such dollar amount, multiplied by ``(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins”
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If it becomes law, the new limits would apply to home sales that happen after the date the law is enacted.
From policy text
“The amendments made by this section shall apply to sales and exchanges after the date of the enactment of this Act.”
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Supporters say this could encourage more homeowners to sell, which could put more homes up for sale—especially in markets where prices have risen a lot.

TaxesHousingEconomy

Impact Analysis

Personal Impact

How this policy affects specific groups of people

Mixed Impacts(5)

Housing Assistance

Neutral

Child Tax Credit

Neutral

Renter

Neutral

Small Business Owner

Neutral

Gig Worker

Neutral

Positive Impacts(4)

Homeowner

Helps

Retiree

Helps

Chronic Illness

Helps

Disability Benefits

Helps

Milestones

2 milestones2 actions

Feb 13, 2025House

Referred to the House Committee on Ways and Means.

Feb 13, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

Immediately after the bill becomes law (enactment date)

New, higher tax-free limits apply to home sales after the law is enacted

If you sell your primary home after the enactment date, you may owe less (or no) federal tax on your home-sale profit compared with today’s limits.

Starting with the first tax year that begins after 2024 (for most people, 2025)

Inflation adjustments begin for tax years starting after 2024

Over time, the $500k and $1M limits would automatically rise, which helps keep the tax break from shrinking as prices increase.

Before the first filing season after enactment

IRS updates forms and instructions for reporting home-sale gains under the new limits

Sellers and tax preparers would follow updated rules when filing the return for the year you sold your home.

Related News

8 articles

Realtor.com·2 months ago

The 10 Real Estate Stories That Shaped Housing in 2025

Year-in-review story that specifically cites the More Homes on the Market Act as a bipartisan alternative to changing home-sale capital gains taxes, and discusses the exclusion limits and indexing concept.

Realtor.com·8 months ago

Minnesota Homeowners Could Face Hidden Tax on Home Sale Profits

Explains how current federal home-sale gain exclusions can create tax exposure and explicitly describes the More Homes on the Market Act as the proposed fix (doubling limits and indexing to inflation).

Realtor.com·8 months ago

Texas Homeowners Could Face Hidden Tax on Home Sale Profits

Hyperlocal explainer that explicitly references the More Homes on the Market Act’s higher exclusion limits and inflation indexing, and positions it as one approach to unlocking listings.