Officials Float Idea of Cutting Capital Gains Tax on Home Sales
As part of the lead-up to the midterm elections, the White House may propose new tax breaks that benefit Americans selling their primary residence.
During a conversation on Fox Business, National Economic Council Director Kevin Hassett and host Larry Kudlow, who led the council during Trump’s first term, said the White House may propose new tax breaks on capital gains.
Kudlow said he had spoken to President Donald Trump about indexing capital gains to inflation, as well as making changes to capital gains taxes on home sales that would shield more of homeowners’ profits from taxes.
Kudlow said Trump was “very interested” in those ideas.
Won’t Happen Quickly
“These are not necessarily rich people,” Kudlow said. “These are empty nesters who own a house for 30 or 40 [years], but they shouldn’t have to pay the Biden inflation tax.”
Experts told CNBC, however, that such an effort is unlikely to happen quickly, and that the benefits would skew to wealthier homeowners.
“These are not necessarily rich people,” Kudlow said. “These are empty nesters who own a house for 30 or 40 [years], but they shouldn’t have to pay the Biden inflation tax.”
Any change to the home sale capital gains exclusion would require action from Congress, and CNBC noted it’s unclear how interested the administration is in pursuing the idea.
“President Trump is always exploring new ideas to Make America Wealthy Again, but any policy announcements will come from the Administration directly,” White House spokesman Kush Desai told CNBC in an emailed statement.
Changes to the tax law ahead of the midterm elections are also “extremely unlikely,” given the tight time frame, said Jude Boudreaux, a Certified Financial Planner and Partner and Senior Financial Planner with The Planning Center in New Orleans, Louisiana.
Recent Efforts
“Just based on how difficult it seems to be to get any legislation passed recently,” said Boudreaux.
Hassett’s and Kudlow’s remarks follow other recent efforts from lawmakers to reduce or eliminate capital gains on home sales.
Earlier this year, Sens. Ted Cruz, R-Texas, and Tim Scott, R-S.C., sent a letter to Treasury Secretary Scott Bessent, asking him to reduce capital gains taxes by indexing a home’s basis with inflation.
Several bills in Congress have also sought to address the issue.
