Shenango Valley News

U.S. Representatives Mike Kelly and Jimmy Panetta have reintroduced the bipartisan More Homes on the Market Act, aimed at addressing housing affordability issues in the United States. The legislation seeks to amend the tax code to encourage homeowners to sell their properties, thereby increasing housing supply and alleviating affordability challenges nationwide.

The proposed bill would adjust the capital gains tax exclusion on the sale of a primary residence, raising it from $250,000 to $500,000 for single filers and from $500,000 to $1 million for joint filers. These thresholds have remained unchanged since 1997 and have not been adjusted for inflation, posing difficulties for homeowners, particularly seniors and middle-class families.

Rep. Kelly stated, “As housing prices have increased, people who have chosen to downsize have been unfairly punished with massive tax burdens.” He emphasized that homeowners deserve to retain more of their earnings during retirement after investing in their homes over the years.

Rep. Panetta highlighted the financial constraints faced by homeowners due to stagnant tax exemptions amidst rising home prices. “By modernizing the capital gains exclusion,” he said, “our bipartisan More Homes on the Market Act will enable more people to sell their homes... This commonsense fix will expand housing inventory, ease affordability challenges.”

Housing experts attribute part of the tight housing market conditions to outdated capital gains tax exclusions. A report from 2023 noted that 8% of U.S. home sellers made over $500,000 in profit compared to just 1.3% in 2003.

Rep. Nicole Malliotakis expressed her support for reducing Americans' tax burdens through this bill: “This bill will protect middle-class families from a large tax bill on capital gains when selling their primary residence.”

Rep. Suzan DelBene mentioned feedback from constituents who feel financially trapped due to potential taxes upon selling their homes: “This legislation would provide meaningful tax relief by doubling the capital gains tax exclusion.”

Rep. Rudy Yakym added that amid rising prices and inflation, many Americans face unfair taxes when downsizing: “Hardworking Americans deserve to be able to save their resources as they simplify their lives.”

Rep. Lou Correa stressed that taxpayers should not choose between downsizing and incurring significant taxes: “This common-sense, bipartisan legislation will ensure that American[s] who choose to downsize... don’t face an unnecessary tax burden.”