A BILL to amend and reenact § 58.1-322.02 of the Code of Virginia, relating to individual income tax subtraction; long-term capital gains from sale of principal residence.
HB1210 amends Virginia’s individual income tax subtraction statute to create a new subtraction for certain long-term capital gains from the sale of a taxpayer’s principal residence. Specifically, for taxable years beginning on and after January 1, 2025, and before January 1, 2030, the bill would allow taxpayers to subtract from Virginia taxable income the portion of gain that is taxed as a long-term capital gain for federal purposes, is attributable to the sale of a principal residence, and exceeds the federal exclusion limits under 26 U.S.C. § 121(b). In practical terms, the bill would provide additional state tax relief to homeowners who realize gains above the federal home-sale exclusion cap.
The bill amends § 58.1-322.02 of the Code of Virginia, which lists the various income items that may be subtracted in computing Virginia taxable income. It does not alter federal tax law, but it would change Virginia’s conformity to federal treatment of home-sale gains by adding a new state subtraction. The change would affect individual income taxpayers who sell a principal residence at a gain large enough to exceed the federal exclusion amount, potentially reducing their Virginia income tax liability during the specified five-year period.
The available context shows no recorded committee discussion or votes, and the bill was left in the House Finance Committee. As a result, there is no documented floor debate or vote history to indicate broader legislative support or opposition. The absence of recorded testimony makes it difficult to identify a formal consensus, but the bill’s introduction suggests an intent to provide targeted tax relief rather than a broad restructuring of the income tax code.
Because there are no transcripts or votes, there are no specific stated points of contention in the available record. The main policy issue implicit in the bill is whether Virginia should extend tax relief to high-value home sales beyond the federal exclusion, which could benefit homeowners with substantial appreciation while reducing state revenue. Any debate would likely center on the cost of the subtraction, its temporary nature, and whether the benefit should be limited to principal residences and to gains above the federal threshold.
HB1210 would add a new subtraction to Virginia’s individual income tax code for certain long-term capital gains from the sale of a principal residence, effective for tax years 2025 through 2029. This would amend § 58.1-322.02 and reduce Virginia taxable income for eligible taxpayers whose home-sale gains exceed the federal exclusion under IRC § 121(b). The bill would primarily affect individual homeowners with larger gains and would likely reduce state general fund revenue to the extent taxpayers claim the new subtraction.
There is no recorded committee transcript or vote history in the provided materials, so the bill’s sentiment cannot be measured from debate or roll-call data. The bill was left in the House Finance Committee, which suggests it did not advance in the available legislative process. Based on the text alone, the measure appears to be a targeted tax-relief proposal with a narrow beneficiary class, but no formal support or opposition is documented in the record provided.
No specific contention is documented in the available transcripts or votes. The likely policy debate would be over whether Virginia should provide an additional subtraction for home-sale capital gains above the federal exclusion, balancing homeowner tax relief against potential revenue loss. Other possible concerns include whether the benefit would disproportionately aid higher-income taxpayers and whether a temporary subtraction is the appropriate mechanism for housing-related tax relief.