This week, Rep. Craig Goldman (R-TX) introduced what he’s calling the Don’t Tax the American Dream Act. This legislation is aimed at eliminating federal capital gains taxes on the sale of your primary home if you’ve lived there for at least two years.

Under current tax rules, most homeowners selling their main residence pay no capital gains tax on up to $250,000 of profit ($500,000 for married couples) if they meet the ownership and use criteria. That exemption has been on the books for decades and hasn’t been adjusted for how much home prices have climbed. In my opinion that makes the exemption almost obsolete. 

The new bill would go a step further: no capital gains tax at all on the sale of your primary home after two years. In plain terms, if you buy a place, live in it as your main residence for two years, and then sell it, you wouldn’t owe federal tax on any of the gain.

Why Now? What’s the Argument Behind It

Proponents mainly Republican members of Congress argue a few key things:

• People are “overtaxed” on home sales: The bill’s sponsors say the current tax setup discourages homeowners from selling and moving up, especially older owners who are sitting on big gains from years of price appreciation.

• Housing supply is tight: They claim that by removing the tax bite from a sale, more owners might list, increasing inventory and helping buyers.

• Affordability could improve: The idea is that if sellers keep more of their profit, particularly in pricey markets, that frees up cash for buyers especially younger families trying to move from starter homes.

That’s the sales pitch, anyway. Whether it would actually meaningfully increase supply or lower prices is a separate debate among economists and housing experts. My thoughts are we already pay a yearly property tax there shouldn't be MORE taxes when you go to sell, you already paid more than your share! 

Why This Matters (or Doesn’t) to Local Buyers and Sellers

Here’s the practical takeaway for all you people here locally or anywhere else:

• Right now, nothing has changed. This bill was just introduced and has to go through committee and both chambers of Congress before becoming law. So current tax rules still apply.

• The issue it tries to address is real. In many parts of the country, long-time homeowners have seen their home values far outpace the old exemption thresholds. That creates a psychological tax lift, even if the real tax owed is still limited, that makes some owners reluctant to sell.

• Removing capital gains on primary homes would be a big shift. If Congress passed this, it would be one of the biggest changes to how home sales are taxed in decades. It wouldn’t eliminate all costs of moving (closing costs, moving expenses, new mortgage costs, etc.), but it could make the math of selling and upgrading much more appealing to all Americans.

A Bit of Real Talk

As someone who talks to buyers and sellers every week, I think it’s worth separating the political framing from the housing reality:

• Politicians often latch onto tax headlines because they sound good in a talking point. “No tax on home sales” reads nicely, but the real question for most clients is, “Will this actually help me afford a home or sell mine faster?”

• In hot markets with low inventory, anything that nudges more sellers to list can help buyers. But in markets where prices have dipped or there’s already plenty of supply, the policy’s impact wouldn't be much.

• And let’s be honest most people don’t buy or sell because of a capital gains tax rule. They move because of jobs, family changes, lifestyle, schools. Tax policy might influence timing, not motivation.

• Bottom line, in my opinion, and the biggest reason I support this act is that we already pay property taxes yearly. Why are we taxed again when we sell? I could go on about how we were already taxed on the money we made to buy the property in the first place, but you get it. 

If this bill gains traction and starts moving in Congress, I’ll share deeper analysis on how it could affect selling decisions and pricing dynamics here in Clackamas County and the rest of the country. For now, it’s an interesting proposal worth watching, but not something that changes the practical landscape today.

Contact me through the website to start planning your next move. 

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