Could Seniors Soon Get a Big Tax Break When Selling Their Home?

A new bill making its way through Congress could bring meaningful tax relief to long-term homeowners looking to sell. The Nest Egg Protection Act, introduced by Rep. Nicole Malliotakis, proposes raising the capital gains tax exclusion up to $1 million for homeowners over 65 who sell a home they have owned for at least 25 years, double the current maximum, during a three-year window from 2027 through 2030.

The current exclusion of $250,000 for single filers and $500,000 for married couples has been in place since 1997 and was never tied to inflation. With the median home price rising from $129,000 in 1997 to over $419,000 today, many long-term homeowners, especially here in California, now face a significant tax bill if they choose to sell.

The bill is still in committee and has not yet attracted co-sponsors, but it is gaining attention from real estate organizations across the country. This is especially relevant in high-appreciation markets like North County San Diego, where decades of ownership often mean substantial gains.

If you are a long-term homeowner wondering what a sale could mean for your tax situation, I always recommend speaking with a tax professional and I am happy to connect you with one.