There is a widespread consensus that housing has become unaffordable in the U.S. For example, the National Association of Home Builders reported last March that 60% of U.S. households cannot afford a $300,000 home, while the median price has now risen to over $400,000. For most families, the numbers simply do not add up.
The capital gains exclusion was created in 1997. Before that, owners could defer paying tax if they rolled proceeds into a new home of equal or greater value, and those who were over age 55 could also use a one-time $125,000 gains exclusion if they bought a cheaper house. Congress simplified matters by setting a flat $250,000 maximum exclusion from capital gains for single filers and $500,000 for married couples, with no rollover provision. The change reduced paperwork for homeowners (who no longer had to track rolled-over gains from house to house) and the IRS alike. But lawmakers didn’t index the exclusion cap to overall inflation, let alone to the increase in housing prices.
Meanwhile, this important bill (No Tax on Home Sales Act—H.R. 4327) is stalled in the US Congress primarily due to partisan disagreement on its fiscal impact, with opponents fearing massive revenue loss funding social programs and disproportionate benefits to the wealthy, while supporters (like Realtors) argue it boosts housing supply by removing an outdated tax barrier, but it faces difficulty passing as standalone legislation and needs inclusion in broader tax packages.
Housing prices have soared since the 1990s, but the tax rules that govern selling a home haven’t changed a bit. Current law allows excluding $250k (single) / $500k (joint) of capital gains from primary home sales, limits unchanged since 1997, failing to keep pace with inflation and rising home values.
H.R. 4327 aims to remove these caps entirely for primary residences, aiming to unlock housing inventory and help long-term owners, according to the National Society of Tax Professionals.
In this year of congressional elections, voters have a decisive weapon to force undecided congressmen to pass this law. Call them, write them, and compel them to call a decisive vote on H.R. 4327 if they want a favorable vote in November.
Further arguments and details HERE ↓
democraciaparticipativa.net/in...-effort-to-be-passed
Topic Author
