President Trump recently stated that his government was “thinking about” eliminating capital gains taxes on home sales to assist jumpstart the languishing property market. Long-term homeowners in the country’s most costly property areas are expected to benefit the most from such a reform.
The real estate industry has long advocated for removing or increasing the capital gains limit on home sales, which is currently $250,000 for single homeowners and $500,000 for married couples. The industry claims that high tax bills keep some homeowners who want to relocate or downsize stuck in homes that no longer meet their needs.
Consider the instance of a homeowner in San Francisco, where housing values more than quadrupled between 2000 and 2025, reaching a median price of over $1 million today. A homeowner who paid $300,000 for their property in 2000 could profit by $700,000 if they sold now. Depending on their tax filing status, between $200,000 and $450,000 of those gains may be taxed at rates ranging from 15% to 20%. Under any circumstances, their tax burden would be in the tens of thousands of dollars.
Those owners are receiving more attention in today’s market because for-sale inventory is limited in many areas of the country, causing house values to reach new highs. It’s uncertain how much assisting wealthy homeowners would energize a sluggish market. While it could increase inventories, other analysts believe it could exacerbate the affordability issue.
Any adjustments to the capital gains restriction would need congressional approval. Trump made the statements earlier this week in response to a question from Brian Glenn, a reporter for the conservative network Real America’s Voice and the boyfriend of Rep. Marjorie Taylor Greene. The Georgia Republican recently sponsored “The No Tax on Home Sales Act” to repeal the levies.
According to the National Association of Realtors, approximately 10% of homeowners nationwide have enough equity to exceed the $500,000 restriction for couples. The organization has called for rethinking the caps. In states where housing prices have grown rapidly and residences are more expensive, the percentage can be significantly greater.
Alex Caswell, the creator of Wealth Script Advisors in San Francisco, primarily serves customers in California and New York, many of whom must consider capital gains taxes when making housing purchases.
“This will primarily affect people in affluent towns and those who have owned their homes for a long time,” Caswell said the crowd. “We have experienced a significant price increase since the lows of 2008, so anyone who bought after that period stands to benefit significantly.”
He believes that if the law passes, buying and selling activity in those states will increase, but he is concerned that more senior homeowners with significant purchasing power will compete with first-time homebuyers for smaller, less expensive properties.
