A House Bill to Boost the Housing Supply
A bipartisan pair of U.S. House of Representatives lawmakers introduced legislation earlier this year to boost the number of homes available for sale. They have recently made a public push to raise awareness about the bill's potential impact if it is passed.
The proposed "More Homes on the Market Act," presented by Reps. Jimmy Panetta (D-Calif.) and Mike Kelly (R-Penn.) in March, aims to amend the tax code in order to incentivize more homeowners to sell their properties and increase the housing supply.
Under the bill's current language, the sales gain tax exclusion would be raised to $500,000 for single filers and $1 million for joint filers. Presently, single homeowners can only exclude $250,000 in gains from capital gains taxes, while joint filers can exclude $500,000.
Rep. Panetta's announcement in March pointed out that these amounts were set in 1997 and have not been adjusted for inflation. This has particularly impacted homeowners in California, where housing costs are among the highest in the nation.
The lawmakers previously introduced a similar bill in September 2022 under the previous Congress, but it did not progress beyond referral to the House Ways and Means Committee. The updated version of the bill, House Resolution (H.R.) 1321, has gained support from five additional cosponsors and is now headed to the same committee.
Rep. Panetta stated in a recent interview with MarketWatch that the proposed legislation offers a simple solution to address housing supply constraints. Many long-time homeowners face the dilemma of selling their homes, which have appreciated significantly, and incurring substantial tax liabilities or holding onto their properties without utilizing their capital gains.
Housing affordability and supply have become focal points for federal and state lawmakers, with bipartisan efforts being made despite political polarization.