Here’s something most homeowners don’t find out until it’s too late.

The federal capital gains exclusion — the amount of profit you can keep tax-free when you sell your primary home — hasn’t been updated since 1997. That year, the median home price in the U.S. was $129,000.

Today it’s nearly triple that.

The current limits are $250,000 for single filers and $500,000 for married couples. Those numbers sound generous until you’ve owned a home in Hampton Roads for 15 or 20 years, watched your equity grow, and realized that a significant chunk of your profit could go straight to the IRS the moment you sell.

Right now, more than 13 million homeowners nationwide would exceed today’s capital gains exclusion if they sold. And research projects that by 2030, more than 56% of homeowners could have equity surpassing the $250,000 cap. That’s not a wealthy-seller problem. That’s a middle-class homeowner problem — and it’s getting worse every year. National Association of REALTORS

What’s in Congress Right Now

There are two bills actively working through the 119th Congress that Hampton Roads homeowners need to know about:

H.R. 1340 — The More Homes on the Market Act (introduced February 2025) would double the exclusion limits and index them for future inflation. It currently has over 80 bipartisan cosponsors. National Association of REALTORS

H.R. 4327 — The No Tax on Home Sales Act (introduced July 2025) would eliminate the federal capital gains tax on the sale of a primary residence entirely. Narfocus

President Trump has also weighed in publicly, saying “We are thinking about no tax on capital gains on houses.” National Association of REALTORS

This isn’t a partisan issue. 82% of voters support adjusting the exclusion for inflation and helping more homeowners move without a tax penalty. HousingWire

Why This Matters for Hampton Roads Specifically

The “lock-in effect” is real — and it’s one of the biggest reasons inventory in Virginia Beach, Chesapeake, Norfolk, and Suffolk stays tight. Longtime homeowners who want to downsize, right-size, or simply move on are doing the math and staying put because the tax hit isn’t worth it.

That’s not a market problem. That’s a policy problem. And it’s directly affecting buyers who can’t find homes to purchase.

I’ve been navigating Hampton Roads real estate since July 1999. I’ve seen markets shift, rates move, and inventory tighten — but the capital gains conversation is one I’m having more often now than at any point in my career. If you’ve owned your home for a while and you’re wondering what selling would actually net you after taxes, that’s exactly the kind of conversation we should have before you make any decisions.

Read the bills yourself:
🔗 H.R. 1340 — More Homes on the Market Act: congress.gov/bill/119th-congress/house-bill/1340

🔗 H.R. 4327 — No Tax on Home Sales Act: congress.gov/bill/119th-congress/house-bill/4327