US President Donald Trump meets Philippine President Ferdinand Marcos Jr. (not pictured) in his oval office in the White House in Washington, DC, on July 22, 2025.
Kent Nishimura | Reuters
President Donald Trump said the administration is considering ending the capital gains tax on home sales to boost the housing market.
When asked about the idea for the oval office on Tuesday, Trump told reporters, “We’re thinking about it.”
“If the Fed cuts (interest) interest rates, we don’t even need to do that,” he said. “But we don’t think there’s a tax on the capital gains of our home.”
Under current law, home sellers can face capital gains taxes if their profits exceed $250,000 for a single filer or more than $500,000 for married couples jointly filed.
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Trump’s comments are R-Ga. It will take place about two weeks after Rep. Marjorie Taylor Greene introduced the NO tax in the Home Sales Act to eliminate capital gains tax on major home sales.
“Homeowners who have lived in their homes for decades, especially seniors in places where their value has skyrocketed, should not be forced to be placed due to IRS penalties,” she said in a statement. “My bill unlocks that fairness, helps to correct housing shortages and supports the long-term financial security of American families.”
However, the proposal could be expensive and it is unclear whether the measure has broad Congressional support, experts say.
“I think this could generate some interest, but they’re more likely to raise the exemption than completely eliminating taxes,” Howard Greckman, a senior fellow at the Urban Blue Kings Tax Policy Center, told CNBC.
People who pay capital gains for home sales
The $250,000 and $500,000 capital gain exclusions (applied to primary home sales) established in 1997 have never been indexed for inflation.
Since 1997, the median home sale price has risen from around $145,000 to around $417,000 as of the first quarter of 2025, according to Federal Reserve data.
As home values rise, certain individuals, such as longtime homeowners, are likely to exceed the $250,000 and $500,000 thresholds that could cause capital gains taxes, experts say.
If your home sales profit exceeds $250,000 or $500,000, capital gains will be collected as 0%, 15%, or 20%, depending on your taxable income. According to the IRS, excessive profits above these thresholds could also result in so-called 3.8% net investment income tax, depending on other investment returns.
According to a 2025 survey by the National Association of Realtors or NAR, roughly 29 million homeowners (34%) could exceed the $250,000 threshold for one filer, and the $8 million (10%) could exceed the $500,000 limit jointly filed. The organization has long advocated capital gains reforms for home sales.
Homeowners in states such as Washington, California, Utah and Massachusetts are more likely to be affected, according to NAR data.
However, many homeowners don’t realize that they can’t reduce their profits in home operations by adding so-called capital improvements, such as home renovations, to the original purchase price, experts say.
If capital gains are eliminated from home sales taxes, the measure would primarily benefit older and wealthy sellers, according to an analysis released Tuesday by Yale University’s Budget Lab.
