BiggerPockets Daily Would Investors Benefit From the "No Tax on Home Sales Act?"
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Sep 8, 2025 A proposed change to capital gains taxes could revolutionize home sales by eliminating tax liabilities on primary residences. This legislation, if passed, would particularly benefit homeowners but leave investment properties untouched. The discussion delves into potential impacts on housing markets, especially in areas like California, and examines the lock-in effect influencing homeownership trends. Political implications surrounding tax relief for property owners are also explored, highlighting the ripple effects for investors.
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Unlimited Exclusion For Primary Homes
- The No Tax on Home Sales Act would remove the $250k/$500k caps on primary residence gain exclusions.
- That change would let homeowners sell primary residences with unlimited tax-free gains if they meet the residency test.
Investors Largely Excluded
- The bill applies only to a primary residence and excludes rentals, vacation homes, and commercial properties.
- Depreciation recapture still applies to investment property sales, so landlords see no direct tax break.
Use House Hacking Strategically
- Consider house hacking because living in the unit for two of five years preserves the primary-residence exclusion.
- Use house hacking to capture investor-like returns while qualifying for unlimited tax-free gains under the proposal.