Increase Senior Home Sale Exclusion

Full Title:
To amend the Internal Revenue Code of 1986 to temporarily increase the capital gains exclusion for any qualifying senior who sells a principal residence during a qualifying year, and for other purposes.

Summary#

This bill would change the tax rule for profit from selling a main home when a seller is a senior. It adds a temporary rule that applies to home sales after December 31, 2026 and before January 1, 2031 (taxable years 2027–2030). Under the bill: an individual who is at least 65 on the sale date and not married would have a $1,000,000 capital gains exclusion for the sale of a qualifying residence (replacing $250,000 in the existing rule). Married taxpayers who file a joint return and where either spouse is at least 65 would use $1,000,000 in place of $500,000 for the joint exclusion. A qualifying senior who is married and files a separate return would have the $250,000 amount replaced by $500,000. A "qualifying residence" must be the seller's principal residence that was owned by the taxpayer (or by either spouse for joint filers) for at least 25 years. The amendment is added to section 121(b) of the Internal Revenue Code and applies to taxable years beginning after December 31, 2026.

What it means for you#

  • If you are age 65 or older on the sale date and you meet the ownership rule, the bill would raise the amount of gain you can exclude from income when you sell your main home for sales in 2027–2030.
  • Unmarried qualifying seniors would see the exclusion amount set to $1,000,000 for eligible sales.
  • Married couples filing jointly where at least one spouse is 65 or older would use a $1,000,000 joint exclusion for eligible sales.
  • Married qualifying seniors who file separate returns would see a $500,000 exclusion for eligible sales.
  • The home must have been owned for at least 25 years to meet the bill's "qualifying residence" rule.

Expenses#

No publicly available information.

Proponents' View#

Sponsor(s) include Nicole Malliotakis and Michael Lawler; the bill text contains no proponents' statements or additional explanations.

Opponents' View#

No publicly available information.