06/05/2026
Would you pay CGT if you sell?
The current capital gains tax exclusion amounts are $250K for single filers and $500K for joint filers. The problem is that those exclusion amounts were set in 1997. Since then, home prices have risen ~3.5X! As a result the NAR estimates that over 25 million homeowners have gains >$250K and over 8 million have gains >$500K. That’s a lot of people paying a lot of CGT if they sell — another incentive for them to just stay in their home.
TP: These exclusion amounts were large at the time. The goal was clear: ensure that most homeowners don’t have to pay capital gains taxes when they grow their family and upgrade to a bigger/nicer home. Although several proposals, like the ‘More Homes on the Market Act’ (which would double the exclusion amounts) are in Congress, they seem to be moving slowly.