H.R. 1340: More Homes on the Market Act
Sponsor
Jimmy Panetta
Democrat · CA-19
Bill Progress
Latest Action · Feb 13, 2025
Referred to the House Committee on Ways and Means.
Sell your home, keep twice as much tax-free
Why it matters
The amount of home-sale profit you can keep tax-free — $250,000 if you're single, $500,000 for married couples — was set in 1997 and has never been adjusted for inflation, while typical home prices have more than tripled. H.R. 1340 doubles those caps to $500,000 and $1,000,000 and finally ties them to inflation, so a longtime owner sitting on decades of appreciation could sell without a six-figure tax bill.
H.R. 1340, the More Homes on the Market Act, doubles one of the most widely used breaks in the tax code. Today, when you sell your main home, you can exclude up to $250,000 of profit from taxes — $500,000 if you're married and file jointly. The bill raises those to $500,000 and $1,000,000.
Those caps were set in 1997 and have never been adjusted for inflation, even as home values climbed for nearly three decades. H.R. 1340 also fixes that going forward: starting with tax years after 2024, the new $500,000 and $1,000,000 limits would rise each year with inflation, rounded down to the nearest $100, so they don't get stuck again.
Picture a married couple who bought a home for $200,000 long ago and sell it now for $1.1 million — a $900,000 gain. Under today's rules, $400,000 of that is taxable; at the 15% long-term capital gains rate, that's roughly $60,000 owed. Under this bill, the full $900,000 fits inside the new $1,000,000 exclusion, and the tax drops to zero.
Supporters, including more than 100 cosponsors from both parties, argue the frozen caps create a "stay-put penalty": longtime owners who'd owe a big tax bill simply don't list their homes, tightening supply for first-time buyers. Critics counter that the benefit flows mostly to owners with the largest gains — concentrated in high-cost markets and higher-wealth households — and that the main budget effect is lost federal revenue. Whether doubling the exclusion actually moves more homes onto the market, or mostly cuts taxes for people who'd sell anyway, is the central debate.
The change would apply to home sales completed after the bill becomes law, so the effect would be immediate rather than phased in.
Visual Summary
H.R. 1340 at a Glance
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<img src="https://legisletter.org/images/bill-infographics/hr1340-infographic.jpg" alt="HR1340 Visual Summary - More Homes on the Market Act" style="max-width:100%;height:auto;display:block;" />
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<a href="https://legisletter.org/bill/hr1340-homes-market-act" target="_blank" rel="noopener noreferrer" style="color:inherit;text-decoration:underline;">HR1340 Visual Summary – More Homes on the Market Act</a>
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</div>H.R. 1340 Bill Summary
What H.R. 1340 actually does.
The tax-free limit doubles for single sellers
If you sell your main home and file as a single taxpayer, the amount of profit you can exclude from federal tax rises from $250,000 to $500,000.
The tax-free limit doubles for married couples
Married couples filing jointly could exclude up to $1,000,000 of profit when they sell a principal residence, double the current $500,000.
The caps finally rise with inflation
Starting with tax years after 2024, the new $500,000 and $1,000,000 amounts would be adjusted annually using the federal cost-of-living formula, so they no longer stay frozen for decades.
Inflation bumps round down to the nearest $100
Any inflation increase that isn't an even multiple of $100 is rounded down to the next lowest $100.
Higher limits apply consistently across the rule
Every matching dollar figure in the home-sale exclusion rule is updated to the new amounts, so the increase applies the same way wherever the limit comes up.
It takes effect on sales after enactment
The larger exclusion applies to home sales and exchanges completed after the bill is signed into law, not to earlier sales.
Who benefits from H.R. 1340?
Longtime owners with big gains
People who've owned a home for many years and watched its value climb. Their entire appreciation is more likely to fit under the higher cap, so a sale triggers little or no capital gains tax.
Married couples downsizing or relocating
Empty-nesters and retirees selling the family home get the larger cap — $1,000,000 — making a move to something smaller or closer to family far less costly.
Owners in high-cost housing markets
In California, the Northeast, and other expensive metros, home values commonly exceed the old limits. Owners there are the most likely to have gains above $250,000 or $500,000 and to benefit from the doubling.
Future sellers, through inflation indexing
Because the new caps rise with inflation, owners selling years from now keep the benefit instead of watching it erode the way the 1997 limits did.
Who is affected by H.R. 1340?
Home sellers weighing a move
Owners with substantial equity get a stronger financial reason to list, since more of their gain — or all of it — would be tax-free.
The federal budget
Excluding more home-sale gain from tax means the Treasury collects less revenue. No official score is attached yet, but the lost revenue is the main fiscal effect.
Renters and owners without large gains
They get no direct tax break from this bill. Any benefit would be indirect, and only if the higher exclusion actually brings more homes onto the market.
Tax preparers and real estate agents
They'd need to walk clients through the new $500,000 and $1,000,000 limits and the annual inflation adjustment when planning a sale.
What Congress Is Saying
H.R. 1340 hasn't been debated on the floor yet.
This section updates when a legislator speaks about it on the floor or in committee.
HR1340 Legislative Journey
House: Committee Action
Feb 13, 2025
Referred to the House Committee on Ways and Means.
About the Sponsor
Jimmy Panetta
Democrat, California's 19th congressional district · 9 years in Congress
Committees: the Budget, Ways and Means
View full profile →
Cosponsors (110)
This bill has 110 cosponsors: 64 Democrats, 46 Republicans, reflecting bipartisan support. Cosponsors represent 33 states: Alabama, Arizona, California, and 30 more.
Mike Kelly
Republican · PA
Nicole Malliotakis
Republican · NY
Rudy Yakym
Republican · IN
J. Luis Correa
Democrat · CA
Suzan DelBene
Democrat · WA
Hillary Scholten
Democrat · MI
Julia Brownley
Democrat · CA
Maria Salazar
Republican · FL
Kevin Mullin
Democrat · CA
Darrell Issa
Republican · CA
Josh Harder
Democrat · CA
Don Bacon
Republican · NE
Cosponsor Coverage Map
Committee Sponsors
Ways and Means Committee
17 of 45 committee members cosponsored
14 Democrats across this committee haven't cosponsored yet. Mobilize their constituents
H.R. 1340 Quick Facts
- Committee
- Ways and Means
- Chamber
- House
- Policy
- Taxation
- Introduced
- Feb 13, 2025
Referred to the House Committee on Ways and Means.
Feb 13, 2025
Official Sources
Official bill page with status, cosponsors, and full legislative history for the More Homes on the Market Act.
IRS explainer on the current $250,000/$500,000 home-sale gain exclusion that this bill would double.
Comprehensive IRS guide covering eligibility, worksheets, and reporting for the principal residence gain exclusion.
Full statutory text of the Internal Revenue Code section that H.R. 1340 would amend.
Federal Housing Finance Agency data tracking U.S. home price changes since the 1970s, showing the appreciation that makes the current exclusion limits feel outdated.
Government Publishing Office version of the full bill text as introduced.
Example of how the IRS applies the cost-of-living formula referenced in this bill to adjust tax thresholds annually.
Who is lobbying on H.R. 1340?
2 organizations lobbying on this bill
AMERICAN PROPERTY OWNERS ALLIANCE | 1 |
NATIONAL ASSOCIATION OF REALTORS | 1 |
Showing 1-2 of 2 organizations
H.R. 1340 Common Questions
How much home-sale profit could I keep tax-free under H.R. 1340?
Up to $500,000 if you're single and $1,000,000 if you're married filing jointly — double today's $250,000 and $500,000. The profit is what you clear after costs, not the full sale price, and it applies to your main home.
Why does the More Homes on the Market Act want to double the exclusion?
The current caps were set in 1997 and never adjusted for inflation, while home prices climbed for decades. Supporters argue that leaves longtime owners facing a big tax bill if they sell, so many stay put — keeping homes off a tight market. That's the bill's core argument.
Will the new $500,000 and $1,000,000 limits rise over time or freeze again?
They'd rise. Starting with tax years after 2024, both amounts would be adjusted each year using the federal cost-of-living formula, with any increase rounded down to the nearest $100. That inflation link is meant to keep them from getting stuck the way the 1997 caps did.
If H.R. 1340 passes, would it cover a home I already sold?
No. The higher exclusion applies only to sales and exchanges completed after the bill is signed into law. A sale you closed before enactment would still use the current $250,000 / $500,000 limits.
I'm a single filer — what changes for me specifically?
Your tax-free limit on home-sale profit would go from $250,000 to $500,000. So if you sold with a $450,000 gain, none of it would be taxed under the bill, versus $200,000 taxable today.
Does this bill help renters or first-time buyers?
Not directly — there's no tax break for people who don't own. The only benefit to buyers would be indirect: supporters say a bigger exclusion nudges more owners to sell, adding inventory. Critics question whether it moves many homes or mostly cuts taxes for people who'd sell anyway.
What would doubling the exclusion cost the federal government?
There's no official congressional score attached to the bill as introduced. The main effect would be reduced federal revenue, since more home-sale profit would go untaxed — concentrated among owners with the largest gains. That projected cost is likely to be the central question as the bill moves.
Based on H.R. 1340 bill text
H.R. 1340 Bill Text
“To amend the Internal Revenue Code of 1986 to increase the exclusion of gain from the sale of a principal residence, and for other purposes.”
Source: U.S. Government Publishing Office
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