More Homes on the Market Act

Bill Number: H.R. 1340
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-02-13: Referred to the House Committee on Ways and Means.
Last Updated: 2026-07-10T08:06:23Z

AI-Generated Summary

Purpose

The "More Homes on the Market Act" (H.R. 1340) aims to reduce the tax burden on homeowners selling their primary residence by increasing the amount of capital gain (profit from the sale) that can be excluded from federal income taxes. This is intended to encourage more home sales and improve housing market liquidity.

Key Provisions

Increased Exclusion Amounts:
For single filers (or married individuals filing separately), the exclusion rises from $250,000 to $500,000.
For married couples filing jointly, the exclusion rises from $500,000 to $1,000,000.
Inflation Adjustment: Starting in tax years after 2024, the new exclusion amounts ($500,000 and $1,000,000) will be adjusted annually for inflation using a cost-of-living formula tied to the Consumer Price Index. The base year for this adjustment is 2023, and increases are rounded down to the nearest $100.
Eligibility Rules Unchanged: The bill does not alter existing requirements for the exclusion, such as owning and using the home as a principal residence for at least two of the five years before the sale.
Effective Date: Applies to home sales and exchanges after the date the bill is enacted into law.

Significant Changes to Existing Law

Under current law (Section 121 of the Internal Revenue Code), homeowners can exclude up to $250,000 (single) or $500,000 (joint) of gain from the sale of their main home, with no automatic inflation adjustments.
This bill doubles those amounts and introduces inflation indexing for the first time, potentially increasing the exclusion further over time to account for rising home prices. It also updates related headings and references in the tax code for consistency.

Potential Impacts

On Citizens: Homeowners, especially middle-income families in high-cost areas, may face lower taxes on home sales, making it easier to relocate, downsize, or upgrade without a large tax hit. This could increase the supply of homes on the market.
On Government Agencies: The Internal Revenue Service (IRS) will need to update forms, guidance, and systems to handle the higher exclusions and inflation calculations, potentially leading to reduced federal tax revenue from capital gains (estimated impact not specified in the bill).
On International Relations: No direct impacts, as this is a domestic tax policy change focused on U.S. homeowners.
Broader Economy: May stimulate the housing market by incentivizing sales, but could slightly decrease government funds available for other programs.

Main Stakeholders Affected

Homeowners and Taxpayers: Primary beneficiaries, particularly those selling homes with gains exceeding current exclusions.
Real Estate Industry: Agents, builders, and lenders may see increased transaction volume due to tax incentives.
Federal Government and IRS: Responsible for implementation and enforcement, facing potential revenue loss.
Low- and Middle-Income Households: More likely to benefit if they own homes in appreciating markets, though high-net-worth individuals with multiple properties could also gain.

Notable Legal, Constitutional, or Political Implications

Legal: Amends the tax code without altering core eligibility rules, ensuring continuity with existing anti-abuse provisions (e.g., limits on multiple exclusions). The inflation mechanism aligns with other indexed tax provisions, like standard deductions, promoting fairness amid rising costs.
Constitutional: No apparent challenges; tax exclusions are a standard congressional power under Article I, Section 8 of the U.S. Constitution.
Political: Bipartisan support (introduced by a diverse group of House members) suggests broad appeal as homeowner relief, but could spark debate over federal revenue reduction in a time of budget constraints. May influence future housing or tax reform discussions.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Panetta, Jimmy [D-CA-19]

Cosponsors (142)

Rep. Kelly, Mike [R-PA-16], Rep. Malliotakis, Nicole [R-NY-11], Rep. Yakym, Rudy [R-IN-2], Rep. Correa, J. Luis [D-CA-46], Rep. DelBene, Suzan K. [D-WA-1], Rep. Scholten, Hillary J. [D-MI-3], Rep. Brownley, Julia [D-CA-26], Rep. Salazar, Maria Elvira [R-FL-27], Rep. Mullin, Kevin [D-CA-15], Rep. Issa, Darrell [R-CA-48], Rep. Harder, Josh [D-CA-9], Rep. Bacon, Don [R-NE-2], Rep. McCollum, Betty [D-MN-4], Rep. Goldman, Daniel S. [D-NY-10], Rep. Rutherford, John H. [R-FL-5], Rep. Costa, Jim [D-CA-21], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Swalwell, Eric [D-CA-14], Rep. Lawler, Michael [R-NY-17], Rep. De La Cruz, Monica [R-TX-15], Rep. Pettersen, Brittany [D-CO-7], Rep. Ansari, Yassamin [D-AZ-3], Rep. Liccardo, Sam [D-CA-16], Rep. Gottheimer, Josh [D-NJ-5], Rep. Thanedar, Shri [D-MI-13], Rep. Carbajal, Salud O. [D-CA-24], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Kiley, Kevin [R-CA-3], Rep. Landsman, Greg [D-OH-1], Rep. Lieu, Ted [D-CA-36], Rep. Vargas, Juan [D-CA-52], Rep. Lofgren, Zoe [D-CA-18], Rep. Norcross, Donald [D-NJ-1], Rep. Shreve, Jefferson [R-IN-6], Rep. Nunn, Zachary [R-IA-3], Rep. Budzinski, Nikki [D-IL-13], Rep. Sherman, Brad [D-CA-32], Rep. Pingree, Chellie [D-ME-1], Rep. Craig, Angie [D-MN-2], Rep. Sewell, Terri A. [D-AL-7], Rep. Davids, Sharice [D-KS-3], Rep. Levin, Mike [D-CA-49], Rep. Beatty, Joyce [D-OH-3], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Cuellar, Henry [D-TX-28], Rep. Kim, Young [R-CA-40], Del. Moylan, James C. [R-GU-At Large], Rep. Weber, Randy K. Sr. [R-TX-14], Rep. Green, Al [D-TX-9] and 92 more