Time to raise the Home Sale exclusion [View all]

My DW and I are not wealthy. We have lived in our current residence for 37 years and need to move to a place that requires less maintenance and is more senior friendly.

After decades of rising property values, the capital gains exclusion for home sales of their primary residences, no longer reflects the current market and keeps many unable to take advantage of their equity, especially Seniors. The $250,000/$500,000 thresholds set in 1997 haven’t kept pace with today’s market.

This should be a bi-partisian issue and something that would help all homeowners. Section 121 of the Internal Revenue Code, part of the Taxpayer Relief Act of 1997, allows homeowners to exclude up to $250,000 of capital gains ($500,000 for married couples filing jointly) when selling their primary residence. To qualify, sellers must have owned and used the home as their primary residence for at least two out of the last five years before the sale.

Adjusted for inflation, the 1997 thresholds are approximately $475,000 for singles and $950,000 for married couples in 2024 dollars. Many homeowners now exceed these limits, even after accounting for improvements and selling costs.

Please contact your Represenatives to push for this issue.