01/22/2026
There's a potential MAJOR change being discussed. In Orange County we often need to consider sizable Capital Gains tax when we sell. A new bill, the 'Don’t Tax the American Dream Act,' aims to eliminate these taxes. This could significantly impact the housing market.
Currently, homeowners can only exclude $250,000 if single or $500,000 as couple in profits from capital gains taxes, but our rising home prices, many are exceeding this limit.
It's worthy to note that home values have surged over 260% since the last exemption update in 1997!!
A perfect example that we see often is an elderly couple who's owned their home 50 years. They sell their home for $2M. Without a savvy tax professional they could end up paying 20% on ~1.2M. THAT'S CRAZY!
HOWEVER...in CA if one spouse passes away first and the surviving spouse sells or both and the home is left to heirs in a trust the benefit is the "double step-up in basis" which could lead to $0 in capital gains tax...or even a loss. Wild, right!?! I personally think it's time for some updates.
Do you know anyone who has this as a consideration to selling? This could be a major change that influences sellers who have been sitting on the fence.
What are your thoughts on this potential change... Would it help in your decision making?
Read more here: https://www.rismedia.com/2026/01/20/new-bill-removes-capital-gains-taxes-homesellers/
