Trump Discusses Possible End to Capital Gains Tax on Home Sales

President Donald Trump recently hinted at the possibility of eliminating the capital gains tax on home sales during a press conference with Philippine President Ferdinand “Bonbon” Marcos Jr. A reporter raised a question about the significance of taxes, particularly in relation to unlocking housing sales and the overall real estate market.

“Well, we’re thinking about that,” Trump responded. He continued, suggesting that simply lowering interest rates could effectively stimulate the market, stating that if the Federal Reserve were to make cuts, there might not even be a need for such tax changes.

Trump went on to assert that they currently “think—there is no tax on the capital gains of a home.”

In support of Trump’s comments, Representative Marjorie Taylor Greene (R-GA) praised him for his views on tax-free home sales, referencing her own bill introduced earlier this month—the “No Tax on Home Sales Act.” According to her press release, this legislation includes several key proposals:

• Eliminate the federal capital gains tax on home sales.
• Promote mobility by facilitating sales and increasing housing supply.
• Offer tax credits to homeowners who are relocating or reducing their residence without suffering penalties.
• Support first-time buyers by enhancing inventory and driving down prices in tight housing markets.

Greene’s press release noted that current IRS rules have not been updated since 1997.

Expressing gratitude, Greene remarked, “Thank you, President Trump, for backing my tax-free initiative for the Home Sales Act! My bill aims to remove the federal capital gains tax on the sale of your primary home. You’ve worked hard for it; you deserve to keep it. Let’s get this bill passed!”

According to a CNN explanation on the tax, right now, if a homeowner sells their property within a year, those gains are treated as short-term, meaning they face regular income tax on the profits. However, if they have made a home their primary residence for at least 24 months within the last five years, they could qualify for an exemption on the first $250,000 or $500,000, depending on their filing status. Profits exceeding these amounts are subject to long-term capital gains tax, which varies based on an individual’s income.

Greene’s bill specifically targets those selling their primary homes, rather than individuals flipping houses for profit. Full text regarding the legislation is available through the designated resource.