HB 1340, titled the More Homes on the Market Act, would amend Section 121 of the Internal Revenue Code to increase the federal capital gains exclusion for the sale of a principal residence. Under current law, taxpayers may exclude up to $250,000 of gain ($500,000 for certain joint filers); the bill would raise those amounts to $500,000 and $1,000,000, respectively. It would also add an inflation adjustment so the exclusion amounts rise with cost-of-living changes for taxable years beginning after 2024.
The bill is intended to apply to sales and exchanges after enactment, and its stated policy goal is to encourage more homeowners to sell by reducing the tax cost of moving, thereby increasing the supply of homes on the market. By changing federal tax treatment of home sales, it would directly affect homeowners who realize large gains on their primary residence, especially in higher-cost housing markets where current exclusion limits may be easier to exceed.
Impact
If enacted, the bill would amend federal tax law by revising Internal Revenue Code Section 121, which governs the exclusion of gain from the sale of a principal residence. It would double the exclusion thresholds for eligible taxpayers and establish automatic inflation indexing for those thresholds going forward. The practical effect would be to reduce or eliminate capital gains tax liability for more home sellers, particularly long-term owners and households in appreciating housing markets, and could influence housing turnover and market liquidity.
Sentiment
There is no recorded committee transcript or vote history in the provided materials, so no formal debate or roll-call sentiment is available. The bill’s title and bipartisan list of cosponsors suggest a generally favorable or at least pragmatic interest in the proposal, with support likely centered on housing supply and tax relief for homeowners. However, without hearing records or votes, the overall sentiment can only be characterized as supportive in sponsorship but not yet tested in committee or on the floor.
Contention
The main policy question is whether increasing the home-sale capital gains exclusion would meaningfully put more homes on the market, as the bill’s title suggests, or whether it would primarily provide a tax benefit to owners of high-value homes. Potential concerns include the federal revenue cost, the distributional effects of expanding a tax preference that may disproportionately aid higher-income households, and whether the housing supply impact would be limited. No specific objections or amendments are documented in the provided context, so any contention is inferred from the policy design rather than recorded debate.