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Typically, when you sell an asset for more than you paid, the profit is considered a capital gain — and subject to tax. With U.S. home prices having soared over the years, many homeowners looking to sell now find themselves in position to pay capital gains tax. But President Donald Trump is floating a plan to eliminate this tax specifically on home sales.
At a White House Q&A on July 22, a reporter asked Trump for his view on scrapping the tax to help “unleash” the housing market.
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“We’re thinking about that,” Trump replied. “But [we] would also unleash it just by lowering the interest rates. If the Fed would lower the rates, we wouldn’t even have to do that. But we are thinking about no tax on capital gains on houses.”
Currently, if you’ve owned your primary home for at least two years and sell it with a capital gain, the IRS allows you to exclude up to $250,000 ($500,000 for joint filers) of the taxable gain. But that exclusion was set back in 1997 — when home prices were substantially lower.
Trump’s comment followed U.S. Rep. Marjorie Taylor Greene’s recent introduction of the “No Tax on Home Sales Act,” a bill that would eliminate federal capital gains taxes on the sale of primary residences altogether.
“Thank you, President Trump, for supporting my No Tax on Home Sales Act!” Greene posted on X after his remarks. “You worked for it. You should keep it. Let’s get this bill passed!”
Trump also took aim at the Federal Reserve during his chat with the press, blaming high interest rates for locking would-be buyers out of the housing market — and placing the blame squarely on Fed Chair Jerome Powell.
“[Powell] is too late all the time,” Trump said. “He should have lowered interest rates many times. Europe lowered their rate 10 times. We lowered ours none. And it’s causing a problem for people who want to buy a home.”
The Fed has been holding its benchmark interest rate steady at 4.25-4.50%, while Trump has said that rates should be three percentage points lower to help the economy.
Powell addressed the impact of interest rates on the housing market last September. He acknowledged that the housing market was “in part frozen,” with many homeowners hesitant to sell because they are locked in at lower mortgage rates.
Meanwhile, Greene has argued her bill could help “boost” the nation’s housing supply by removing the capital gains tax obstacle that might discourage homeowners from selling.
The lack of supply remains a pressing issue in the U.S. housing market. A recent Zillow study estimates a shortfall of 4.7 million homes nationwide.
Still, experts aren’t convinced the bill — at least in its current form — will go far.
“I think this could generate some interest, but they’re more likely to raise the exemption than they are to eliminate the tax entirely,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC.
Even that could make a difference. Research by the National Association of Realtors estimates that about 1-in-3 homeowners have accumulated more equity than the federal capital gains tax exclusion would allow. Presently, sales profits that exceed the exemption limits may be taxed at 0%, 15% or 20%, depending on taxable income.
Soaring home prices and elevated mortgage rates have made buying a home increasingly difficult. According to Realtor.com, a typical household now needs to earn $118,530 annually to afford a median-priced home of $402,500 in the U.S. — more than 50% above the national median income of roughly $77,700.
But while owning a home may feel out of reach for many, it’s now easier than ever to start investing in real estate thanks to crowdfunding platforms like Arrived.
The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving any positive rental income distributions from your investment.
For investors seeking monthly dividends, the platform also offers the Arrived Private Credit Fund, which allows you to invest in short-term loans that finance real estate projects, such as renovations, property rehabs or even new home construction.
The fund generates cash returns by collecting interest payments on the loans and distributing monthly payouts to investors. All of the loans are secured by residential housing as collateral, so even if the borrowers default, the underlying property can be sold to keep the fund healthy.
For those interested in tapping into home equity instead, Homeshares offers accredited investors access to the $35-trillion U.S. home equity market — a space that’s historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
