This bill doubles the amount of profit homeowners can exclude from federal income taxes when they sell their primary residence. Currently, single filers can exclude $250,000 in gains and married couples can exclude $500,000; this legislation raises those limits to $500,000 and $1,000,000 respectively. The new limits will adjust automatically each year for inflation starting in 2026, ensuring the exclusion keeps pace with rising home values. The bill applies to all home sales occurring after it becomes law and is intended to encourage more home sales by reducing the tax burden on homeowners, particularly those in high-cost housing markets. No specific funding is required, as the bill is a tax code change that will reduce federal tax revenue.
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