Could You Pay Less Tax When You Sell Your Home?

A Proposed Federal Bill Would Double Capital Gains Tax Exclusions

A proposed federal bill would increase the tax exclusion on profits from selling a primary residence.

IMPORTANT: This article is for educational purposes only and is not tax advice. Karen Musser is a licensed real estate agent, not a tax or financial advisor. Please consult your CPA, tax attorney, or financial advisor for guidance specific to your situation. H.R. 1340 has not been signed into law as of the date of this post. Tax outcomes vary by individual circumstance.

Quick Summary

• A Federal Bill (H.R. 1340) could double the tax free profit limit on your home sale

• Ventura County long-time owners are exactly who this targets

• It hasn't passed yet

• What this could mean for your specific timeline if you sell in 1 vs. 5 years

If you have lived in your Ventura County home for ten, twenty, or thirty years, you have likely built significant equity. That is a position of real financial strength, but it also raises an important question when the time comes to consider a sale: how much of that gain will go to taxes?

A bill currently working through Congress addresses that question directly. H.R. 1340, the “More Homes on the Market Act”, would double the amount of profit you can keep tax free when you sell your primary home, and would adjust that limit for inflation every year going forward.

The bill has not passed. But it has meaningful momentum, and it is worth understanding now, especially if a future move is on your horizon.

What the Current Law Says and Why it Matters

Potential for Capital Gains Exclusion Increase

Since 1997, federal tax law has allowed homeowners to exclude a portion of their capital gain when selling a primary residence:

•        Single filers: up to $250,000 of gain is tax-free

•        Married couples filing jointly: up to $500,000 is tax-free

To qualify, you need to have owned and lived in the home for at least two of the five years before the sale.

Here is the problem: those limits have never been adjusted for inflation. A $250,000 exclusion that was generous in 1997 does not go nearly as far in a Ventura County market where median home prices are now approaching $900,000 and where long-time homeowners regularly carry gains of $500,000, $700,000, or more.

The result is something many homeowners describe as feeling "stuck." Selling makes sense from a lifestyle perspective, downsizing, relocating for retirement, moving closer to family, but the tax bill is large enough to give serious pause.

What H.R. 1340 Would Change

The More Homes on the Market Act would make two core changes:

1. It would double the exclusion amounts.

Single filers would be able to exclude up to $500,000 of gain. Married couples filing jointly could exclude up to $1,000,000.

2. It would index those limits for inflation annually.

Starting after 2024, the exclusion amounts would increase each year based on the Consumer Price Index (CPI). This means the caps would never again fall behind the way they have over the past 28 years.

 What would not change: the eligibility rules. You would still need to have owned and lived in the home for at least two of the five years before the sale. The bill does not extend benefits to second homes, vacation properties, or investment real estate.

Where the Bill Stands Right Now

H.R. 1340 was introduced February 13, 2025, by Representative Jimmy Panetta (D-CA) and has 126 bipartisan cosponsors in the House. A Senate companion bill (S. 3332) was introduced December 3, 2025. As of June 2026, neither bill has come to a floor vote, both remain in committee.

Critics argue the bill would primarily benefit long tenure homeowners in high value markets. Proponents, including the National Association of Realtors, argue it would free up housing inventory and allow homeowners to make the retirement and downsizing moves that currently do not make financial sense.

If passed, the bill would apply to home sales after the date of enactment. It would not apply to sales already completed.

What this means for your planning

Whether or not H.R. 1340 passes, the question it raises, how taxes will affect your net proceeds, is worth discussing now, not the week you decide to list.

The right approach is to work with both a trusted real estate advisor and a qualified tax professional well in advance of any decision. Understanding the numbers early gives you options. Waiting until you are emotionally ready to move, then discovering a significant tax bill, creates pressure at exactly the wrong moment.

If you are a Ventura County homeowner thinking about a future sale, in one year or five, I am available to talk through the real estate side of that equation. We can look at what your home might be worth, what preparation and timing could mean for your net proceeds, and what a thoughtful process looks like from start to finish.

There is no obligation and no pressure. Just a conversation.

Frequently Asked Questions About Capital Gains Tax Exclusions

If H.R. 1340 doesn't pass, does that change what long-time Ventura County sellers should do right now?

Sellers that have been in their home for a long time in Ventura, Oxnard, Camarillo & surrounding areas should keep themselves informed of the current state of the bill; and make a decision based on their personal and financial circumstances.

How much could a Ventura County homeowner with, say, $700,000 in gain actually save if the exclusion doubles?

The exact amount a homeowner would save depends on their tax bracket. If the Seller in Ventura is a single person & has $700,000 in gain, they could reasonably expect to exclude $500,000 & pay capital gains on the remaining $200,000. If the Ventura, Oxnard or Camarillo Seller is a married couple, their exclusion should be 1 million dollars, so no capital gains owed in theory. Homeowners considering selling their home should consult with their CPA , tax attorney or financial advisor for guidance on their specific situation. Karen Musser is not a tax or financial advisor, she is a licensed Realtor, and cannot/will not give tax or legal advice.

Does this bill affect a rental or vacation property, or only a primary residence?

This bill affects only a primary residence that you, yourself have occupied in 2 of the last 5 years. Consult your CPA for guidance on your specific situation. This is not meant to be tax or legal advice.