Trump administration officials raised the possibility of increasing capital gains tax exemptions for Americans selling their primary residences, though financial advisors said any changes before the November midterm elections are unlikely. National Economic Council Director Kevin Hassett and former council head Larry Kudlow discussed the idea on Fox Business on Tuesday. Kudlow said he had spoken to President Donald Trump about the proposal and that Trump was very interested.

Under current law, homeowners selling a primary residence can exclude up to $250,000 of profit for single filers and $500,000 for married couples filing jointly from capital gains taxes if they meet certain IRS conditions. Profits above those thresholds are taxed at long-term capital gains rates of 0%, 15% or 20%, depending on taxable income. The exemption levels have not changed since 1997.

White House spokesman Kush Desai told CNBC that President Trump is always exploring new ideas to Make America Wealthy Again, but any policy announcements will come from the Administration directly. Any change to the home sale capital gains exclusion would require action from Congress.

Jude Boudreaux, a certified financial planner and partner at The Planning Center in New Orleans, said changes to the tax law ahead of the midterm elections are extremely unlikely given the tight time frame. He cited the difficulty of getting any legislation passed recently.

In 2022, roughly 10% of homeowners had gains exceeding the current exemption, according to The Budget Lab at Yale. Those homeowners had an average net worth of roughly $5.7 million. The National Association of Realtors said in a 2025 analysis that nearly 29 million households have built up more equity than the $250,000 federal capital gains tax exclusion for single filers. The group expects that figure to reach 56% of homeowners by 2030.

Several bills in Congress have sought to address the issue. The More Homes on the Market Act, a bipartisan proposal from early 2025, would double the capital gains exemptions for primary home sales profits and adjust those figures annually for inflation. The No Tax on Homes Sales Act, introduced by former Rep. Marjorie Taylor Greene in mid-2025, would eliminate capital gains taxes on the sale of primary residences. Both bills remain in committee.

Earlier this year, Sens. Ted Cruz and Tim Scott sent a letter to Treasury Secretary Scott Bessent asking him to reduce capital gains taxes by indexing a home's basis with inflation. Trump has himself also raised the idea of an end to capital gains tax on home sales.

Certified Financial Planner Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida, said most middle- and lower-income people are not impacted by the exclusion rate and most do not have investments that would incur capital gains taxes. Floating more tax cuts when the government is spending like crazy isn't a good move, McClanahan said.

Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York, said the $250,000 and $500,000 exclusion thresholds have not changed since 1997. Raising the cap there isn't a giveaway because it's catching up to reality, Boneparth said.