In July 2025, President Donald Trump announced that his administration is considering a sweeping change to how capital gains are treated on home sales. Days later, Representative Marjorie Taylor Greene introduced legislation titled the “No Tax on Home Sales Act,” a proposal aimed at eliminating dollar limitations on the capital gains exclusion for principal residences under Section 121 of the Internal Revenue Code.
At first glance, the bill appears to provide relief only for homeowners selling their primary residences. But the potential ripple effects for real estate investors—particularly those active in residential and commercial markets—warrant a closer look.
What Does the Bill Propose?
The No Tax on Home Sales Act would amend Section 121(b) of the Internal Revenue Code by striking the current dollar limitations on capital gains exclusions for the sale of a principal residence.
Under current law, taxpayers may exclude up to $250,000 of gain (single filers), or $500,000 of gain (married filing jointly) from the sale of their primary residence, provided ownership and use tests are met.
The proposed bill would remove those caps entirely, allowing for unlimited capital gains exclusion on qualifying primary home sales.
The bill’s language is relatively simple:
- Strikes the dollar limits from Section 121(b)
- Makes minor conforming amendments to Section 121(c)
- Applies to any sales or exchanges occurring after the enactment date
Key Limitation: It Only Covers Principal Residences
For real estate investors, one key limitation is worth underscoring: The bill applies only to principal residences. That means:
- It does…