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.
- Sponsor
- Rep. Malliotakis, Nicole [R-NY-11]
- Committees
- Ways and Means Committee (primary)
- Last action
- May 29, 2026
Bottom line
This bill offers a temporary, substantial tax break on home sales for long-term senior homeowners, aiming to provide financial relief and potentially encourage housing market activity.
What it actually does
This bill temporarily increases the capital gains exclusion for qualifying seniors who sell their principal residence. For sales occurring between January 1, 2027, and December 31, 2030, unmarried seniors (aged 65 or older) who have owned their home for at least 25 years can exclude up to $1,000,000 in capital gains, a significant increase from the current $250,000. Married couples meeting the same criteria can exclude up to $1,000,000, up from $500,000.
Proponents argue
Supporters would argue that this measure provides much-needed financial relief to seniors who have built significant equity in their homes over decades, allowing them to downsize, relocate, or cover retirement expenses without a substantial tax burden. They might emphasize that it rewards long-term homeownership and helps seniors manage rising costs of living or healthcare.
Opponents contend
Critics might contend that this tax break disproportionately benefits wealthier seniors who own high-value homes and have accumulated substantial capital gains, rather than providing broad relief to all seniors. They could also argue that it reduces federal tax revenue, potentially exacerbating the national debt, and that the 25-year ownership requirement is overly restrictive, excluding many seniors who may have moved more frequently.
The bill is exceptionally short and clear, making it very accessible for a quick and thorough understanding.
Section 1(a), amending Section 121(b) of the Internal Revenue Code of 1986
Temporary Increase to Capital Gains Exclusion for Senior Home Sales
This provision temporarily raises the amount of profit a qualifying senior can exclude from capital gains taxes when selling their primary home. For sales occurring between January 1, 2027, and December 31, 2030, the exclusion limit for unmarried seniors increases from $250,000 to $1,000,000, and for married couples filing jointly, it increases from $500,000 to $1,000,000. To qualify, the seller must be at least 65 years old and have owned their principal residence for a minimum of 25 years.
Supporters argue
Supporters argue this provision directly benefits seniors who have diligently maintained their homes for decades, allowing them to access their accumulated equity more freely for retirement planning, healthcare costs, or downsizing without punitive taxation. It acknowledges the unique financial pressures faced by older Americans and encourages efficient use of housing stock.
Critics contend
Critics might argue that the 25-year ownership requirement is overly stringent, excluding many seniors who may have moved for work, family, or health reasons. They could also point out that the primary beneficiaries are likely those with highly appreciated homes, potentially exacerbating wealth inequality and providing a tax break that is not broadly distributed among the senior population.
Tradeoffs
The provision balances the desire to provide financial relief to long-term senior homeowners against concerns about federal revenue loss and whether the benefit is equitably distributed across the senior population. It also weighs the potential for stimulating housing market activity against the specificity of its eligibility criteria.