Tax Proposals That Could Make Buying and Selling Easier

By Rebecca Durfey

Rebecca Durfey brings over 20 years of experience in real estate transactions within Maricopa County. Despite managing multiple clients simultaneously, her primary focus is to provide a personalized experience that makes you feel like her sole priority. Rebecca and her team are dedicated to efficiently achieving the desired outcomes for each client they serve.

Most homeowners don’t realize that two simple policy changes could boost the housing market and create more opportunities for both buyers and sellers. Right now, many people want to move. They’ve built equity, their needs have changed, and they’re ready for something different. But instead of moving forward, they stay where they are. The reason often comes down to one thing, and that’s the financial impact of selling.

This is where the conversation shifts. It’s not just about supply and demand. It’s about what changes could actually help people move again. Let’s focus on the two tax proposals that could help homeowners:

Updating capital gains tax exclusions. One of the biggest challenges today is that the current capital gains tax exclusion has not kept up with home values. Homeowners can exclude up to $250,000 in gains if single, or $500,000 if married. While that may have worked in the past, many homeowners now have equity that goes beyond those limits.

When they consider selling, they also have to consider the possibility of paying taxes on that extra gain. That potential cost can feel significant enough to stop them from moving, even when the move makes sense for their situation. As a result, they stay in place. Over time, that creates less inventory and fewer market opportunities.

If those limits were increased, it could change that decision. More homeowners would feel comfortable selling because they could keep more of their equity. That would lead to more homes being listed and more movement across the market.

Tax-free equity rollovers for primary homes. Instead of adjusting the limits, what if homeowners could sell their primary residence and transfer all their equity into their next home without being taxed at that time?

This works similarly to a 1031 exchange, which is already used for investment properties. In this case, the equity from the sale would be transferred directly to the next purchase. No tax would be applied during that transition.

For homeowners who have owned their property for many years, this could be a major shift. It removes a key barrier and gives them more flexibility to move when they’re ready.

Why do these two tax proposals matter? Both of these ideas focus on one core issue, which is homeowner hesitation. When selling feels expensive, people delay their decision. When enough people delay, the entire market slows down.

If homeowners had more freedom to access and use their equity, more properties would come to market. That creates more options for buyers and allows the market to move more naturally. It also improves buying power. Homeowners who sell could bring larger down payments, purchase with cash, or use their equity to reduce their interest rate on the next home.

The housing market needs more flexibility. Updating capital gains tax exclusions and allowing tax-free equity rollovers for primary homes could help more homeowners move, increase inventory, and create more opportunities for buyers and sellers. If you’re thinking about selling and have questions about your options, feel free to call or text me at 623-297-4536 or email me at rebeccadurfey@kw.com. I can help you determine the best strategy based on your situation.