Coalition Proposes Changes to Capital Gains Tax for Home Sales
The Coalition for Affordability and Prosperity is pushing the Senate Finance Committee to move forward with legislation aimed at increasing the capital gains tax exclusion for homeowners. They argue that a tax threshold that has not changed in nearly thirty years is making it harder for long-term homeowners to sell their properties at a time when affordability is a key issue with the midterm elections approaching in November.
In a letter dated September 1, which was shared exclusively with Breitbart News, Chuck Flint, the Executive Director of the Coalition, urged Senate Finance Committee Chairman Mike Crapo (R-ID) to arrange a markup for S.3332, known as the More Homes on the Market Act. He copied the letter to Ranking Member Ron Wyden (D-OR).
Flint wrote, “I am writing on behalf of the Coalition for Affordability and Prosperity to encourage the Committee to organize a markup of S.3332, the More Homes on the Market Act, and bring it to the Senate floor.” He referred to this legislation as “a bipartisan fix to a tax issue created by Congress that only Congress can resolve.”
Flint pointed out that rising interest rates contribute to a stagnant housing market, but he highlighted an outdated capital gains tax law from 1997 that allows homeowners to exclude up to $250,000 in gains from the sale of their home, or up to $500,000 for married couples.
According to him, “This statute hasn’t been updated in 29 years.” He remarked that while Congress annually adjusts the standard deduction and retirement contribution limits for inflation, it has not done so for the home-sale exclusion.
Flint elaborated on the issue by noting the significant increase in home prices, stating that the median price of a U.S. home has soared from about $139,000 in 2000 to over $417,000 now — that’s more than a 200 percent increase, yet the exclusion has remained static.
He indicated that this situation effectively acts as a hidden tax hike on homeowners, discouraging long-term sellers, especially retirees on fixed incomes, from listing their homes due to the potential for an unfair tax burden. “This was not the intent of Congress when the bill was enacted,” Flint argued.
The proposed S.3332 seeks to raise the exclusion to $500,000 for individuals and $1 million for couples, with both figures indexed for inflation in the future. Flint described it as “returning a 1997 policy to its intended value” and emphasized it as “a matter of basic fairness.”
Flint underscored the bipartisan backing for the measure, noting that the Senate version, introduced by Sen. John Cornyn (R-TX), boasts 22 co-sponsors. Among them are Sens. Michael Bennet (D-CO), Steve Daines (R-MT), Adam Schiff (D-CA), John Barrasso (R-WY), and Mark Kelly (D-AZ).
The corresponding House bill, H.R. 1340, has garnered support from 154 bipartisan co-sponsors, according to the letter.
He pointed out, “The level of support for this policy change shows both the problem and the solution are largely agreed upon.”
Furthermore, he highlighted the committee’s capability to address the issue at hand. Flint wrote, “Congress can’t reduce mortgage rates through voting, but it can modify the tax code, and this Committee is in a position to do just that.” He stated that every month the bill remains untouched is another month where sellers remain stagnant, contributing to diminished inventory.
“We sincerely request that the Committee schedule a markup for S.3332 and forward it favorably to the full Senate in a timely manner,” Flint concluded, expressing gratitude to Crapo for his consideration.
Flint also referenced recent data on the housing market to underscore his argument. He mentioned in a Washington Examiner op-ed that statistics from Redfin indicate home sales and new listings reached their lowest point in nearly two years, with sales down 4.1 percent in July and pending transactions falling by 2.5 percent.
Interestingly, Flint tied the proposal to the political landscape ahead of the midterms. He mentioned a generic ballot average showing Democrats leading by 6.7 points, pointing out that they need to gain four Senate seats to take control of the chamber, which is currently split 53-47 in favor of Republicans, with Vice President JD Vance holding the tiebreaker.
“Affordability is the primary issue, and this isn’t exactly a secret,” Flint remarked. He referenced Pew polling indicating that 47 percent of respondents wanted economic discussions to be part of candidates’ platforms, in contrast to just 19 percent focusing on healthcare.
Additionally, Flint spoke about the impact of inflation on homeowners in an interview with OAN correspondent John Hines. When Hines suggested that much of the rise in home values is due to inflation and questioned whether the proposal would shield homeowners from taxes on those inflationary gains, Flint confirmed, “That’s exactly it. Let them keep their money. The government shouldn’t profit from that.”
When Hines brought up reconciliation as a potential route for advancing the proposal, Flint replied, “I think there are various paths they could take to pass it.”
