American Home Mobility Act
- Sponsor
- Rep. Lawler, Michael [R-NY-17]
- Committees
- Ways and Means Committee (primary)
- Last action
- Oct 22, 2026
Bottom line
This bill expands the like-kind exchange tax deferral to include principal residences, aiming to reduce tax burdens for long-term homeowners who wish to move.
What it actually does
This bill amends Section 1031 of the Internal Revenue Code to allow for the nonrecognition of capital gains or losses on like-kind exchanges of principal residences. To qualify, the property must have been owned and used by the taxpayer as their principal residence for at least 30 years prior to the exchange, and the new property acquired must also be held for use as the taxpayer's principal residence. This extends the tax deferral treatment currently available for investment properties to certain long-term owner-occupied homes.
Proponents argue
Supporters argue this bill will enhance housing mobility for long-term homeowners, particularly those who have accumulated significant equity over decades, by allowing them to defer capital gains taxes when moving to a new principal residence. This could help older individuals or families needing to downsize or relocate without incurring a substantial tax liability, thereby freeing up housing stock and stimulating the housing market.
Opponents contend
Critics might contend that this provision primarily benefits wealthier homeowners with substantial capital gains, further exacerbating wealth inequality by providing a tax break that is less accessible to lower and middle-income individuals. They may also argue it could reduce federal tax revenue without clear broader economic benefits, and that existing Section 121 exclusions already address many principal residence sales.
The bill text is very short and straightforward, making it highly accessible for a quick read and understanding.
Section 2(a)
Nonrecognition of Gain or Loss on Like-Kind Exchanges of Certain Residential Real Property
This provision amends Section 1031(a)(1) of the Internal Revenue Code to allow homeowners to defer capital gains taxes when they exchange their principal residence for another principal residence. To qualify, the original property must have been owned and used as the taxpayer's principal residence for at least 30 years prior to the exchange, and the new property must also be held for use as the taxpayer's principal residence. This extends a tax deferral mechanism previously limited to investment properties.
Supporters argue
Supporters argue this provision will facilitate mobility for long-term homeowners, particularly those who might be "locked in" by high capital gains taxes. It allows them to move without immediate tax consequences, potentially freeing up larger homes for younger families and stimulating the housing market.
Critics contend
Critics might argue that this provision disproportionately benefits wealthier individuals who own homes for extended periods and have substantial capital gains, potentially increasing wealth inequality. They may also point out that existing Section 121 already provides a significant exclusion for principal residence sales.
Tradeoffs
The provision balances the goal of increasing housing mobility for long-term homeowners against concerns about potential revenue loss and whether it primarily benefits a specific, potentially affluent, demographic. It also creates a distinction between long-term homeowners and those who own for shorter periods.