Boomers Selling Longtime Homes Would Get Tax Holiday on Their Profits Under New Bill

Representative Nicole Malliotakis introduced the "Nest Egg Protection Act," H.R. 9064, proposing a three-year tax holiday on home sale profits for individuals over 65. This bill, if enacted, would temporarily raise the capital gains tax exclusion to $1 million for married couples filing jointly and $500,000 for single filers, provided they have owned the home for at least 25 years. The proposed holiday would run from 2027 through 2030. Malliotakis stated the act aims to encourage seniors to downsize and mitigate the significant tax liabilities resulting from substantial home value appreciation. The current capital gains tax exclusion for home sales was established in 1997 without inflation adjustments. Since then, the median home price has increased from $129,000 in 1997 to $419,300 currently, leading many long-term homeowners to face substantial taxes on their profits. This legislative proposal comes amid a national housing shortage, with younger generations expressing pessimism about homeownership affordability. The issue is particularly acute in rapidly appreciating urban centers like California and New York, where home values are highest. Proponents argue that reducing the tax burden would stimulate more home sales, potentially easing market pressures.