President Donald Trump has announced that his administration is considering a bold move to eliminate capital gains taxes on the sale of primary residences. The idea, still in its early stages, could shake up the housing market and impact millions of American homeowners. Supporters say it would reward hard work and inject much-needed inventory into the market, while critics worry it could further inflate home prices and strain federal revenue
In an Oval Office meeting on July 22, Trump confirmed that his team is “thinking about no tax on capital gains on houses.” This means homeowners could potentially sell their primary residences without paying federal taxes on the profit from the sale—regardless of how much that profit is.
Currently, under federal law, individuals can exclude up to $250,000 of capital gains from taxes when selling their primary residence, and couples filing jointly can exclude up to $500,000. These limits have not changed since 1997, despite significant increases in home prices. The median sales price for existing homes hit $422,800 in May 2025, up 239% from $124,800 in 1997.
Trump emphasized that if the Federal Reserve lowered interest rates, the policy might not be necessary, stating, “If the Fed would lower the rates, we wouldn’t even have to do that.”
The Impact on the Housing Market
Trump’s goal is to unleash the housing market by giving sellers a major financial incentive to list their homes. Eliminating the capital gains tax would allow homeowners to keep more of the money they earn from a sale, which could encourage them to move, downsize, or reinvest in a new property.
Supporters believe this would inject much-needed inventory into a tight housing market. By making it easier and more profitable to sell, the policy could ease the supply crunch and help drive down prices for buyers who are currently priced out.
Greene’s Companion Bill
The proposal lines up with legislation introduced by Rep. Marjorie Taylor Greene of Georgia, known as the No Tax on Home Sales Act. Greene posted a video of Trump’s comments on X and thanked him for backing her bill. She wrote, “You worked for it. You should keep it. Let’s get this bill passed!”
Trump had already signaled support for the legislation earlier in July, calling it “a very big positive” and “a great incentive for a lot of people that really need money.”
A study from the National Association of Realtors found that 34% of U.S. homeowners—around 29 million people—have built up enough equity that they could exceed the current $250,000 or $500,000 capital gains exemptions. About 8% of home sales in 2023 resulted in profits above the $500,000 cap, a significant increase from previous years. In 2019, only 3% of sales reached that level.
According to CoreLogic, the rising cost of housing and stagnant capital gains exemptions have created “challenging housing affordability” for many Americans. In effect, the existing tax structure penalizes long-term homeownership in a rapidly appreciating market.
Supporters argue that eliminating the tax is not only fair, but necessary. “This is an outdated, unfair burden—especially in today’s housing market,” Greene wrote. Advocates say the policy would empower middle-class Americans who have seen the value of their homes rise sharply over time.
They also note that the tax cut could ease mobility, allowing older homeowners to downsize or relocate without being penalized for cashing out their equity. In theory, this would open up more homes for younger families.
Critics, however, warn that the move could have unintended consequences. Some tax analysts argue that expanding the exemption or eliminating the tax altogether would mainly benefit wealthier homeowners with high-value properties. Others worry it could further inflate housing prices by encouraging speculative buying and selling.
There is also concern about the impact on federal revenue. The Congressional Budget Office has already projected that Trump’s earlier tax bill—signed on July 4—will increase the national debt by $3.4 trillion over the next decade. Critics say removing the capital gains tax on home sales could worsen the debt while doing little to help renters or low-income families.
Some also accuse Trump of pushing policies that would personally benefit him and other wealthy real estate investors, though the current proposal appears to focus only on primary residences.
Trump cannot make this policy change on his own. Eliminating capital gains taxes on home sales would require congressional approval. While Greene’s bill has the president’s backing, it remains unclear whether it will gain enough support to move forward.
The White House has not released any detailed plan or timeline for implementing the change, and the idea is still being evaluated alongside Trump’s continued push for lower interest rates from the Federal Reserve.
As Trump put it, “We are thinking about that.”
