A bipartisan bill that would double the federal capital gains tax exclusion on home sales is gaining cosponsors in Congress, with supporters arguing the current limits β unchanged since 1997 β are pushing a growing share of homeowners to stay put rather than sell. According to Realtor.com, the House and Senate versions of the More Homes on the Market Act now have a combined 151 House members and 23 senators signed on as cosponsors, up from roughly 80 House backers when the House bill was introduced last year.
The legislation would raise the amount of profit a homeowner can exclude from capital gains tax when selling a primary residence from $250,000 to $500,000 for single filers, and from $500,000 to $1 million for married couples filing jointly. It would also index both thresholds to inflation going forward, so they no longer require a separate act of Congress to keep pace with home prices.
What the bill would change
The House version, H.R. 1340, was introduced February 13, 2025, by Rep. Jimmy Panetta, D-Calif., with Rep. Mike Kelly, R-Pa., as lead original cosponsor, and was referred to the House Ways and Means Committee, according to congress.gov and the bill text published by the Government Publishing Office. A companion bill, S. 3332, was introduced in the Senate on December 3, 2025, by Sen. John Cornyn, R-Texas, with cosponsors including Sen. Michael Bennet, D-Colo., Sen. Steve Daines, R-Mont., Sen. Adam Schiff, D-Calif., Sen. John Barrasso, R-Wyo., and Sen. Mark Kelly, D-Ariz. It was referred to the Senate Finance Committee. Neither bill has had a committee vote or floor vote as of this week; both remain in committee, and the growing cosponsor lists are the main measure of momentum so far.
Both bills target Section 121 of the tax code, the primary-residence exclusion Congress last set in the Taxpayer Relief Act of 1997, when the median U.S. home price was about $129,000, according to the National Association of Realtors. The exclusion has never been adjusted for inflation since.
Who’s behind it, and why now
In a joint statement announcing the House bill’s reintroduction, Rep. Panetta said modernizing the exclusion “will enable more people to sell their homes, downsize if they choose, and retain savings,” while Rep. Kelly said that “after years of making improvements into their homes, homeowners deserve to keep more of their hard-earned money during their golden years,” according to a press release from Kelly’s office.
The National Association of Realtors has lobbied for the change, framing it as a fix for what it calls a hidden barrier to housing supply. NAR President Kevin Brown told Realtor.com that “just like people were locked into their homes at lower interest rates, seniors often find themselves locked in because of home equity penalties.” NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn made a similar case in a July 2025 NAR release, saying, “This isn’t about speculation. It’s about protecting equity and helping the entire market function more efficiently.”
The numbers behind the push
NAR estimates that nearly 29 million homeowners β about 34% of all owners β now have enough home equity to exceed the current $250,000 exclusion if they sold, and that more than 13 million would actually owe capital gains tax on a sale today. NAR projects that share could climb to 56% of homeowners by 2030 and 70% by 2035 if the thresholds stay frozen, as home prices continue rising faster than the 1997 caps. Realtor.com reported that doubling the exclusion is estimated to cost the federal government $46.4 billion in forgone revenue, or $4.9 billion if the higher limits were restricted to homeowners age 55 and older β an option some lawmakers have floated as a narrower, cheaper alternative. NAR also cites internal polling showing 82% of voters support indexing the exclusion to inflation.
What it means
Verified facts: two bipartisan bills with the same goal are moving through separate committees, cosponsor counts have grown substantially since introduction, and neither has advanced to a committee markup or floor vote. The proposed thresholds and 1997 baseline are matters of public record in the bill text.
What’s attributed interpretation: NAR’s argument that the exclusion cap is actively suppressing housing inventory β by discouraging longtime owners, particularly retirees, from selling β is the trade association’s position, not an independently verified market effect. The revenue-cost estimates likewise come from advocacy-aligned reporting rather than a Congressional Budget Office score, which has not yet been published for either bill.
RealtyWire analysis: a rising cosponsor count is a common early signal of legislative momentum, but it is not a predictor of passage on its own. The bill’s fate will likely hinge on whether it can be attached to a broader tax package, since standalone revenue-losing bills rarely reach the floor without an offset identified by the tax-writing committees.
What to watch
The next concrete markers will be whether either the Ways and Means or Finance committee schedules a markup, and whether a Congressional Budget Office score is released that could reshape the revenue debate. Also worth tracking: whether narrower alternatives β such as limiting the higher exclusion to homeowners 55 and older, an idea Realtor.com noted lawmakers have discussed β gain traction as a lower-cost compromise. Home price trends will keep shaping the political pressure behind the bill; RealtyWire has tracked continued price gains across most U.S. metros and an acceleration in annual home-price appreciation, both of which push more sellers toward the current exclusion caps. More policy coverage is available on RealtyWire’s housing market page.
