"Members of Congress are urging the U.S. Treasury to adjust capital gains calculations for inflation, arguing that outdated tax thresholds are increasingly penalizing long-time homeowners. Real estate advocates say the current limits—unchanged since 1997—are discouraging sellers and tightening housing supply, prompting renewed calls for reform that could affect millions of homeowners and the broader housing market."

Recent congressional outreach to the U.S. Department of the Treasury highlights growing concern that the current capital gains exclusion for home sales has not kept pace with inflation. Under existing law, homeowners can exclude up to $250,000 in gains—or $500,000 for married couples—when selling a primary residence if eligibility requirements are met. However, those thresholds were established nearly three decades ago and have never been adjusted, even as home values and the cost of living have risen substantially. As a result, policymakers and housing advocates argue that more homeowners are unintentionally being pushed into taxable territory when selling their homes.

For real estate professionals, the debate underscores a broader issue affecting housing market mobility. As appreciation continues to elevate home equity, some long-time homeowners may hesitate to sell because of potential capital gains tax exposure. This “lock-in” effect can reduce housing inventory—an outcome already seen in many markets struggling with limited supply. For REALTORS®, understanding the policy discussion is important not only when advising longtime homeowners but also for recognizing how tax policy can influence listing activity and overall housing availability.

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Attribution: Rauber, M. (2026, March 6). Congress writes to Sec. Bessent on indexing capital gains. National Association of REALTORS®. https://www.nar.realtor/magazine/real-estate-news/congress-writes-to-sec-bessent-on-indexing-capital-gains

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