The More Homes on the Market Act took another step forward this week, and it could have a meaningful impact on homeowners who have built substantial equity in their properties.
Under current federal law, qualifying homeowners can generally exclude up to $250,000 of capital gains when selling a primary residence, or $500,000 for married couples filing jointly.
The proposed legislation would double those limits to $500,000 for individuals and $1 million for married couples, with the amounts also adjusted for inflation going forward.
Why It Matters in the Bay Area
For longtime Oakland and Bay Area homeowners, decades of appreciation can result in significant gains when a property is sold. A higher exclusion could allow eligible homeowners to keep more of that wealth rather than having as much of their gain potentially subject to federal capital gains tax.
That could give homeowners more flexibility to:
- Purchase their next home
- Downsize or relocate
- Reinvest in real estate
- Support retirement goals
- Transfer more wealth to the next generation
The proposal is particularly interesting for homeowners who have been in their properties for many years and may have substantial appreciation but have been hesitant to sell because of the potential tax consequences.
What Homeowners Should Know
The legislation has not yet become law, so homeowners should continue planning based on current tax rules. The existing requirements for qualifying for the primary-residence exclusion would also still apply.
If you’re considering selling, now is a good time to understand your property’s current value, estimated gain, and potential tax implications—and to think strategically about what you want to do with your equity next.
Your home may be one of your largest assets. The right sale strategy can help turn that equity into the next step in your wealth-building journey.
As a minority-owned Oakland brokerage, we help Bay Area professionals and investors navigate real estate sales, property management, and turnkey investment opportunities with a focus on building generational wealth.
This information is for educational purposes only and is not tax, legal, or financial advice. Consult a qualified tax professional regarding your individual situation.
