March 2, 2026
The Honorable Mike Johnson
Speaker of the House
Washington, DC 20515
The Honorable John Thune
Senate Majority Leader
Washington, DC 20510
Dear Speaker Johnson and Majority Leader Thune:
We write today to urge you to take on one of the biggest drivers of today’s housing affordability crisis: an outdated tax code provision that punishes long-time homeowners for selling their homes. In far too many cases, Americans who bought decades ago now face taxes on what are often merely inflationary capital gains. That tax burden discourages home sales, tightens housing supply, and makes it harder for Millennial families to buy the family homes they need.
To solve this problem, we urge you to pass H.R. 1340 and S. 3332, the “More Homes on the Market Act.” This bill would update the principal residence capital gains exclusion by catching it up to inflation and indexing it going forward.
Under current law, homeowners may exclude up to $250,000 in capital gains from the sale of a principal residence, or $500,000 for married couples filing jointly, if both spouses meet the ownership and use requirements. These dollar amounts were established in 1997 during the Clinton Administration and have never been adjusted for inflation, even as home prices, wages, and the cost of living have risen dramatically. The 1997 original levels have gone down by half after inflation.
As a result, more middle-class homeowners now face a real tax penalty if they sell and move. This “lock-in” effect reduces the number of existing homes available for sale and worsens today’s inventory shortage. According to recent industry estimates, roughly one in ten homeowners could face capital gains tax liability upon selling their home, and millions of additional homeowners could be pulled into the tax over time if inflation continues and the exclusion remains unchanged.
H.R. 1340 and S. 3332 would fix this problem directly by restoring the real original value of the exclusion and ensuring it keeps pace with inflation going forward. This reform would help unlock more housing supply, support healthy market turnover, and expand homeownership opportunities for younger families. It would also provide timely relief for families who have already endured nearly 20% cumulative Bidenflation in recent years.
The “More Homes on the Market Act” is broadly supported, bipartisan, and common sense legislation to make housing more affordable for working families. It’s time to put it up for a vote.
Sincerely,
Charles Sauer
Market Institute
Ryan Ellis
Center for a Free Economy
Grover Norquist
Americans for Tax Reform
John Berlau
Competitive Enterprise Institute
Steve Moore
Committee to Unleash Prosperity
Gerard Scimeca
Case for Consumers
Karen Kerrigan
Small Business and Entrepreneurship Council
Patrick M. Brenner
Southwest Public Policy Center
C. Preston Noell III
Tradition, Family, Prosperity
Phil Kerpen
American Commitment
Brandon Arnold
National Taxpayers Union
Daniel J. Mitchell
Center for Freedom and Prosperity
Peter J. Thomas
Conservative Caucus
Morton Blackwell
Conservative Leadership PAC
James Edwards
Conservatives for Property Rights
Thomas A. Schatz
Council for Citizens Against Government Waste
Annette Meeks
Freedom Foundation of Minnesota
Jason Pye
Exiled Policy
George Landrith
Frontiers of Freedom
Seton Motley
Less Government
Aiden Buzzetti
The Bull Moose Project
Jeffrey Mazzella
Center for Individual Freedom
John Hinderaker
Center of the American Experiment
Julio Rivera
Reactionary Times
Yael Ossowski
Consumer Choice Center
Joshua Delano
Southeast Texans for Liberty
Crystal Laramore
Wheelchairs for Warriors
Dewayne Moore
The Dewayne Moore Foundation
Gene Mills
Louisiana Family Forum
James Davis
Fans for Fair Play
Palmer Schoening, M.P.P.
Family Business Coalition
Ralph Benko
Capitalist League
James L. Martin
60 Plus
Saulis “Saul” Anuzis
American Association of Senior Citizens
James Taylor
Heartland Institute
Autry Pruitt
MAGA.Black
Ed Rush
God Talks Foundation
Donny Ferguson
Americans for a Better Economy
Carmine Denisco
United Inventors Association
Norm Singleton
US Policy