04/07/2026
Nearly 29 million U.S. homeowners have already exceeded the capital gains tax exclusion on their primary residence, which is becoming a growing reason many homes aren’t hitting the market. In many cities, longtime homeowners are choosing to stay put rather than sell and face a significant tax bill, contributing to the ongoing housing inventory shortage alongside high interest rates and affordability challenges.
The issue is gaining attention in Washington, where lawmakers are discussing possible updates to the primary home capital gains exclusion. The current limits — $250,000 for single filers and $500,000 for married couples — haven’t changed since 1997, even though home values have increased by more than 260% during that time.
