Could the Home Sale Capital Gains Tax Limit Be Eliminated?

February 2, 2026

A New Proposal from

Texas Congressman Craig Goldman

Worth Watching

Homeowners across North Texas have seen property values rise significantly over the past decade. For many sellers—especially long-time owners and empty nesters—this raises an important question:


Will taxes on home sale profits change in the near future?



In January 2026, a new bill introduced by a Texas congressman could potentially reshape the conversation.

The Current Rule:
The $250,000 / $500,000 Exclusion

Under current IRS law (Internal Revenue Code Section 121), homeowners can typically exclude:

  • Up to $250,000 of profit if filing single
  • Up to $500,000 of profit if married filing jointly


This applies when the home is your primary residence and you meet the ownership and use requirements.



For most homeowners, this exclusion means no capital gains tax is owed when they sell.

A New January 2026 Proposal from Texas

In late January 2026, Rep. Craig Goldman (R–Texas) introduced a proposal called the “Don’t Tax the American Dream Act” (source: Congressman Goldman press release).


According to Goldman, the bill would aim to eliminate federal capital gains taxes on the sale of a primary residence for homeowners who meet the standard occupancy requirement.


Goldman argues that removing this tax burden could:

  • Help homeowners move more freely
  • Encourage downsizing and relocation
  • Increase housing supply
  • Reduce barriers for long-time owners with significant appreciation

What Would This Change Mean? (Pros & Cons)

If enacted, this proposal would go beyond today’s $250,000/$500,000 exclusion limits. Qualifying homeowners could potentially avoid federal capital gains taxes entirely on the sale of their primary residence—a major shift, especially for long-time owners in higher-value markets.


Potential Benefits

  • Could provide significant tax relief for homeowners with large appreciation
  • May help empty nesters downsize more easily without a tax barrier
  • Could encourage more homeowners to sell, potentially increasing housing supply
  • Most impactful in high-growth areas like North Texas, where values have risen sharply


Potential Concerns

  • The largest benefits would go to higher-end sellers, since most homeowners already fall under current limits
  • Could reduce federal tax revenue by eliminating taxes on very large home-sale gains
  • May create uneven advantages across different price points and markets


Overall, the biggest impact would be felt by long-time homeowners whose gains exceed today’s exclusion caps.

Has It Been Voted On—and What Should Homeowners Do?

Not yet. This proposal was only recently introduced and must still go through committee review, House and Senate votes, and presidential approval. For now, it is not law.


To track its progress, start with Rep. Goldman’s official announcement. Once the bill is formally posted on congress.gov, you can search the bill name or “Craig Goldman home sale capital gains”


While it’s worth watching, no rules have changed yet—so sellers should stay informed and consult a tax professional if their gain could exceed current limits.

Connect With Cindy Coggins Realty Group

Have questions about your home, your equity, or what today’s market means for you? Contact Cindy Coggins Realty Group—we’re always here as a trusted local resource.


📞 Call or Text: (469) 499-7452
📧 Email:  cindycoggins@kw.com