President Trump on Tuesday signaled he may support eliminating the capital gains tax on home sales, a move that could dramatically reshape the U.S. housing market by offering sellers major financial relief. Speaking from the Oval Office during a meeting with Philippines President Ferdinand Marcos Jr., Trump said his administration is “thinking about no tax on capital gains on houses” as part of broader efforts to revive housing affordability.
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Housing Market Under Strain
Trump made the remarks in response to Real America Voice reporter Brian Glenn, who referenced a bill recently introduced by Rep. Marjorie Taylor Greene aimed at abolishing the capital gains tax on home sales.
The president criticized Federal Reserve Chair Jerome Powell for keeping interest rates high, claiming, “It’s causing a problem for people who want to buy a home.” “People aren’t able to buy a house because this guy is a numbskull. He keeps the rates too high, and is probably doing it for political reasons,” Trump said, predicting Powell will be gone in “eight months”, even though his term ends in May 2026.
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Greene’s Bill Gains Traction
Greene’s proposed No Tax on Home Sales Act seeks to end the federal capital gains tax on profits from primary home sales, a tax last updated in 1997. Under the current law, individuals can exclude up to $250,000 in gains and couples up to $500,000 when selling their primary residence.
“Families who work hard, build equity, and sell their homes should not be punished with massive tax bills,” Greene said. “The capital gains tax on home sales is an outdated, unfair burden, especially in today’s housing market, where values have skyrocketed. My bill fixes that.”
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Market Freeze for Seniors
A study by the National Association of Realtors (NAR) suggests the long-standing tax thresholds are distorting the housing market. Roughly 29 million Americans, or 34% of homeowners, would exceed the $250,000 exemption today, while 8 million joint filers would surpass the $500,000 mark.
This has led to what NAR calls a “stay-put penalty,” discouraging older homeowners from selling, even when downsizing or relocating makes sense. The result: stagnated housing turnover and worsening supply shortages. “Homeowners who have lived in their homes for decades, especially seniors in places where values have surged, shouldn’t be forced to stay put because of an IRS penalty,” Greene said.
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Economic Pros and Cons
While Trump’s endorsement could energize the bill, the broader economic impact remains contested. Eliminating capital gains tax could release locked-up housing inventory, especially in high-demand markets, said Realtor.com senior economist Joel Berner.
“It could be a good thing for the market. In particular, where inventory is constrained, it could benefit regular folks,” Berner noted. However, Berner cautioned that the change would mostly benefit wealthier homeowners whose properties have appreciated significantly. “It wouldn’t move the needle for a regular family, unless you have a home that’s appreciated a lot,” he said.
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Impact on Federal Revenue
Critics argue that ending the tax would erase a major federal revenue stream. Additionally, it could fuel investor speculation, worsening housing affordability in the long run. According to BatchData, nearly 27% of all homes sold in early 2025 were purchased by investors, the highest share in five years. “Removing the capital gains tax could heighten investor interest, pushing home values even higher,” Berner warned.
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Political Climate and Next Steps
Trump’s backing comes shortly after Congress passed his One Big Beautiful Bill, which eliminated taxes on tips and overtime. However, like that package, removing the capital gains tax would require congressional approval.
When asked directly if eliminating the tax was a priority to “unleash” the housing market, Trump said, “We’re thinking about that,” before adding, “If the Fed would lower the rates, we wouldn’t even have to do that.” The White House declined to provide additional comment beyond Trump’s remarks.
