A member of Congress has introduced a bill that would let homeowners age 65 and older exclude up to $1 million in profit from federal capital gains tax when they sell a primary residence, quadrupling the exclusion available to a single filer today and doubling the exclusion available to a married couple. The bill has been introduced and referred to committee, nothing more, so it is not law and changes nothing about what a homeowner owes on a sale closing this year. For longtime owners who have watched decades of home-price appreciation turn a modest purchase into a large taxable gain, the proposal is worth understanding now, even though its fate in Congress remains uncertain.
What the Nest Egg Protection Act Would Do, and What It Doesn’t Change Yet
Rep. Nicole Malliotakis, a New York Republican, introduced H.R. 9064, the Nest Egg Protection Act, on June 1. The bill would raise the capital gains exclusion on the sale of a primary residence to $1 million, with the same cap applying to both single filers and married couples filing jointly, for sellers age 65 or older who have owned and lived in the home for at least 25 years. If enacted, the higher exclusion would apply to home sales in tax years 2027 through 2030, a four-year window rather than a permanent change. The bill has been referred to the House Ways and Means Committee, which has jurisdiction over federal tax legislation.
None of that is current law. As of today, a homeowner selling a primary residence, regardless of age, can exclude up to $250,000 in capital gains as a single filer or $500,000 as a married couple filing jointly, the same limits that have applied since 1997. Those thresholds were never indexed to inflation, so a homeowner today faces the identical dollar cap that applied when median home prices were a small fraction of what they are now. The bill has not had a committee hearing or a vote, has no companion legislation in the Senate as of this reporting, and carries no guarantee of ever reaching the House floor.
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Why Lawmakers Are Targeting a Threshold Set in 1997
Malliotakis has framed the bill around longtime homeowners in expensive markets who, she says, are effectively discouraged from selling because of the tax bill a sale would trigger. Her district includes Staten Island and parts of Brooklyn, where the median home price tops $700,000, and her office argues that owners who bought decades ago at far lower prices are now sitting on gains that can exceed the current exclusion by a wide margin. Real estate groups that back the bill describe long-owned homes as effectively “frozen” out of the market because sellers weigh a large capital gains bill against staying put.
The bill is not the only recent attempt to change how capital gains tax applies to home sales, and the broader pattern is one of proposals that have stalled rather than advanced. Kiplinger reported that earlier bills aiming to eliminate or raise the home-sale exclusion, including a 2025 measure to eliminate the tax entirely, failed to advance out of committee, and cited CoreLogic data showing roughly 8% of home sales now produce gains above the current exclusion, more than double the share five years earlier. The same reporting noted that research from the Yale Budget Lab found only about 10% to 15% of homeowners currently have gains on a primary residence that exceed the exclusion limits, and that those owners tend to be older and wealthier, with home values averaging around $1.4 million. That research is also the basis for critics’ argument that a higher exclusion would concentrate its benefit among a relatively narrow, higher-net-worth slice of older homeowners rather than typical retirees.
What a Homeowner Selling This Year Should Actually Plan Around
Anyone selling a primary residence in 2026 needs to plan around the law as it exists today, not the version Congress might eventually pass. That means the $250,000 single filer exclusion and $500,000 joint filer exclusion still apply, provided the seller meets the existing ownership and use test of living in the home for at least two of the five years before the sale. Any gain above those amounts is taxed at capital gains rates on this year’s return regardless of a seller’s age or how long they have owned the property. A homeowner expecting a gain anywhere near the current thresholds, particularly in a high-appreciation market, is better served by running the numbers with a tax professional before listing than by assuming a future law will apply retroactively to a sale made now.
For homeowners weighing whether to wait, the honest answer is that no one can predict whether the Nest Egg Protection Act clears the Ways and Means Committee, let alone the full House and Senate, and even a favorable outcome would not take effect before the 2027 tax year under the bill’s current text. The Financial Wire will track the bill’s progress through committee and report if its status changes, but for now it remains exactly what its sponsors call it: a proposal, introduced and awaiting action, not a change to what any homeowner owes today.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
