The No Tax on Home Sales Act: Explained

Overview: No Tax on Home Sales Act

The No Tax on Home Sales Act is a proposed change to how taxes work when you sell your primary home. Today, home sellers can often exclude a set amount of profit from taxes, and this bill would remove that cap.

If the bill becomes law, eligible home sellers could exclude unlimited profit from taxes on the sale or exchange of a principal residence, as long as the other rules for the home sale exclusion are met. This may matter most in higher-priced markets, or for homeowners who have owned their home for a long time and built up substantial value.

The bill would apply to home sales and exchanges that happen after the date the bill becomes law. Note that bills often change on their way to becoming law, so this page will update as new details emerge. For real-time updates, subscribe to our newsletter.

What Is the No Tax on Home Sales Act?

The No Tax on Home Sales Act would remove the current limit on the amount of profit you can exclude from taxes when you sell your primary home.

In plain terms, the bill targets the existing cap that limits how much gain can be tax-free. Under the proposal, the cap would be removed, which means the exclusion could be unlimited when a sale qualifies as a principal residence sale under the existing rules.

How The No Tax On Home Sales Act Works

The bill’s main change is straightforward: it removes the $250,000 and $500,000 caps on tax-free profit from selling a principal residence.

Here’s what the proposal would do:

• Removes the $250,000/$500,000 cap on tax-free profit from selling a primary home
• Allows excluding unlimited gain on a principal residence sale when other rules are met
• Applies to home sales and exchanges after the date the bill becomes law

The key idea is that the sale still needs to qualify as a principal residence sale, and the bill expands the amount of profit that can be excluded once you qualify.

Who Qualifies Under The No Tax On Home Sales Act?

The No Tax on Home Sales Act is written around sales of a principal residence. That means the potential benefit is aimed at homeowners selling the home they live in as their primary home.

In general, the bill’s change may be most helpful when:

• Your home has appreciated above today’s tax-free profit limits
• You are selling in a higher-priced market
• You have owned your home long enough that your profit is well above the current cap

The bill does not describe a special application process. It changes the tax rule that applies to qualifying home sales after the law takes effect.

Who Sponsors the No Tax on Home Sales Act?

The No Tax on Home Sales Act is introduced in the House as H.R. 4327. Sponsorship and cosponsorship can change as the bill moves through Congress, and additional supporters may be added over time. For the latest legislative updates and cosponsors, see the Bill Tracker above.