Home-Sale Tax Bills for Older Owners: What Congress Has Filed and Where Each Stands

As of Oct. 26, 2026, at least six bills in the 119th Congress would change how much profit homeowners can take tax-free when they sell their home. Two are written specifically for sellers age 65 and older. None has received a committee vote. Each is still where it was first referred, in the House Ways and Means Committee or the Senate Finance Committee, according to the official bill status records published by the Government Publishing Office. An introduced bill is a proposal, not a law, and the current federal limits still apply to every home sold today.

The rule today: $250,000 or $500,000

Under Section 121 of the Internal Revenue Code, a seller can exclude up to $250,000 of gain on the sale of a main home, or up to $500,000 on a joint return, according to the IRS explanation of the home sale exclusion. To qualify, the owner generally must have owned the home and lived in it for at least two of the five years before the sale, and must not have used the exclusion on another home in the previous two years. Gain is generally the sale price, minus selling costs, minus the owner's adjusted basis, which starts with the purchase price and adds capital improvements.

The dollar limits date to the Taxpayer Relief Act of 1997, which replaced an older, once-in-a-lifetime $125,000 exclusion that was available only to sellers age 55 and older. The 1997 amounts have never been adjusted for inflation. Long-time owners feel it most: a gain above the cap is taxed as a long-term capital gain.

The bills, and where each one stands

Cosponsor counts come from the bill status records as last updated in 2026 and can change as members sign on.

The two bills written for older sellers

H.R. 9064: a temporary $1 million exclusion

The text of H.R. 9064 creates a "qualifying senior," defined as a person at least 65 years old on the date of sale, and a "qualifying residence," a principal residence owned for at least 25 years. For sales after Dec. 31, 2026, and before Jan. 1, 2031, a single qualifying senior could exclude up to $1 million of gain instead of $250,000. A married couple filing jointly could exclude $1 million instead of $500,000 if either spouse qualifies. The higher limit would then expire. Malliotakis has said the bill would remove a tax "barrier that discourages seniors from selling when they want to," according to HousingWire.

H.R. 7051: tax-free sales to first-time buyers

The American Dream Act takes a different approach. It would add a new section to the tax code under which a seller who is at least 65 (either spouse, on a joint return) pays no tax on the gain from selling real property if three conditions are met: the price is $500,000 or less, the buyer is a first-time homebuyer who will live in the home, and the buyer signs a statement under penalty of perjury confirming both. The bill defines a first-time buyer as someone who, along with a spouse, has never owned a principal residence. Because it covers "real property," the break could also apply to a rental or vacation home, which the regular exclusion does not cover. It would apply to sales from 2027 through the end of 2031.

The broader bills

The More Homes on the Market Act, H.R. 1340, has the most support of any of these proposals. It would raise the limits to $500,000 for single filers and $1 million for joint filers and adjust them for inflation each year. Its 27 original cosponsors included both Democrats and Republicans, and the Senate version has a bipartisan group of cosponsors led by Cornyn and Sen. Michael Bennet (D-Colo.). The National Association of Realtors supports it, arguing that the outdated limits keep long-time owners from selling. Neither version has had a hearing or a markup.

Three House bills, H.R. 4327, H.R. 7034 and H.R. 7131, would go further and strike the dollar caps altogether. Even under those bills, the two-year ownership and use tests would remain, so the exclusion would still apply only to a main home. H.R. 4327 lost its original sponsor when Greene left Congress in January 2026, and Alford took over as lead sponsor. President Donald Trump said in July 2025 that his administration was "thinking about" ending capital gains taxes on home sales, but no such change has been enacted, and only Congress can make it.

The trade-offs are the same for every version. Any increase in the exclusion reduces federal revenue, and the benefit goes only to owners whose gain is above today's limits. A July 2025 analysis by the Yale Budget Lab, using 2022 Federal Reserve survey data, estimated that about 10 percent of homeowner households had gains above the current exclusion, and that those households were older and wealthier on average than other owners. The Lab noted the share has likely grown since 2022 as home prices rose.

What has actually become law

The largest federal housing law of 2026, the 21st Century ROAD to Housing Act, became law on July 11, 2026, without the president's signature after the 10-day window for a veto passed. Its best-known provision bars investors that control 350 or more single-family homes from buying more, starting Jan. 7, 2027. It is aimed at housing supply and did not change the home sale exclusion, which IRS guidance updated in 2026 still lists at $250,000 and $500,000.

One senior-focused tax change did become law in 2025, but it is not about home sales. For tax years 2025 through 2028, people age 65 and older can claim an extra deduction of up to $6,000 each, or $12,000 for a married couple who both qualify. It phases out above $75,000 of modified adjusted gross income ($150,000 for joint filers), according to the IRS.

Existing rules that matter after a spouse dies

Two provisions already in the tax code often matter more to older sellers than any pending bill, according to IRS Publication 523. A surviving spouse who has not remarried can still claim the full $500,000 exclusion if the home is sold within two years of the spouse's death and the other requirements are met. And when a joint owner dies, the late spouse's share of the home generally takes a new basis equal to its market value on the date of death. In community property states, including Nevada, Arizona, California and Texas, the entire home usually gets that new basis. Either rule can shrink or erase the taxable gain.

What this means for a seller weighing the timing

Consider a hypothetical couple, both 70, who bought their home 30 years ago and would realize a $700,000 gain if they sold it. Under current law, $200,000 of that gain would be taxable. Under H.R. 1340, none of it would be. Under H.R. 9064, none of it would be either, but only on a sale between 2027 and 2030. Under H.R. 7051, the gain would be tax-free only if the sale price were $500,000 or less and the buyer had never owned a home.

Most of these bills apply only to sales after the date they become law, and H.R. 9064 and H.R. 7051 start no earlier than 2027. The More Homes on the Market Act was also filed in earlier Congresses without passing. Owners planning a sale can track each bill on congress.gov and, for their own numbers, talk to a tax professional. The rules that apply today, including the ownership and use tests and how to calculate basis, are explained in this guide to the home sale exclusion before retirement. More housing and tax coverage is available at Homes For Sale In Mesquite Nevada.