US President Donald Trump says he’s seriously thinking about getting rid of capital gains taxes on the sale of primary homes, a move that could bring major financial relief to homeowners feeling the pinch of rising property values.
The idea lines up with a new bill introduced by Congresswoman Marjorie Taylor Greene called the “No Tax on Home Sales Act.”
What is the Capital Gains tax on home sales?
Right now, the IRS lets you skip paying taxes on up to $250,000 in profit if you’re single or $500,000 if you’re married when you sell your primary residence, as long as you’ve lived there for at least two of the past five years.
But with home prices climbing fast, especially in states like Hawaii and Washington, a growing number of homeowners somewhere between 15% and 30% are breaching those limits and getting hit with tax bills.
Trump’s proposal would wipe out that tax altogether, potentially reshaping how Americans think about homeownership and investment.
Meanwhile, home prices in many parts of the country have more than doubled.
As a result, far more homeowners are now getting hit with capital gains taxes than lawmakers probably imagined when the original rules were put in place.
Donald Trump’s stance
President Trump has thrown his weight behind the proposal in several public appearances, including an Oval Office meeting and a press conference at Joint Base Andrews.
He described eliminating the capital gains tax on home sales as a “great incentive” that could offer meaningful financial relief to homeowners.
At the same time, Trump tied the idea to his broader frustrations with the Federal Reserve.
He suggested that if the Fed lowered interest rates, there might be less need for such a tax break.
“If the Fed would lower the rates, we wouldn’t even have to do that,” he said, taking another swipe at the central bank’s reluctance to ease policy.
Controversial move?
Supporters of the plan say it would let everyday families keep more of the money they earn from selling their homes and possibly encourage more people to put their properties on the market, helping ease the housing supply crunch.
But critics aren’t convinced.
They argue the change would mostly benefit wealthier homeowners and could lead to a noticeable drop in federal tax revenue.
Some housing experts also warn it could make affordability worse, especially for middle and lower-income buyers, by removing a key reason for long-term homeowners to eventually sell.
This proposal also stands out from Trump’s broader 2025 tax agenda dubbed the “One Big Beautiful Bill Act.”
That larger package keeps the existing capital gains brackets of 0%, 15%, and 20% in place for most investments.
But this home sale exemption would mark a clear break from that pattern, making it a major shift in how housing profits are treated under the tax code.
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