The bipartisan More Homes on the Market Act was unveiled in March by Reps. Jimmy Panetta (D-Calif.) and Mike Kelly (R-Pa.) with the goal of amending the tax code to encourage more homeowners to sell their homes, a solution intended to boost the overall supply of houses available on the market.
If passed, the bill will increase the sales gain tax exclusion to $500,000 for single filers and $1 million for joint filers, HousingWire reports. Currently, single home sellers can only exclude $250,000 in gains from capital gains taxes, while joint filers can exclude $500,000.
Rep. Panetta told MarketWatch in an interview last week that Congress can address housing supply constraints with the proposed legislation.
“It’s a pretty simple fix and a pretty straightforward bill,” Panetta said. “A lot of people who have owned homes for a long time are in that position of deciding, do I sell my home that has gained a tremendous amount of capital and then take a huge tax hit? Or do I just sit on it, and give it away?”