Nest Egg Protection Act would raise capital gains tax exclusion for senior home sellers

Rep. Nicole Malliotakis (R-N.Y.) has introduced federal legislation that would temporarily raise the capital gains tax exclusion to $1 million for senior homeowners who sell their longtime primary residences. The move aims to ease tax burdens on older Americans and free up inventory for younger homebuyers.

The bill, H.R. 9064, known as the Nest Egg Protection Act, was introduced June 1 and would apply to individuals and married couples ages 65 or older, according to an announcement from Malliotakis’ office.

Under the proposal, qualifying sellers could exclude up to $1 million in capital gains from federal taxes on the sale of a primary residence, provided they have owned the home for at least 25 years. The exclusion level would be the same for single and joint filers.

Tax thresholds haven’t changed in decades

Current law allows homeowners to exclude up to $250,000 in capital gains for individuals and $500,000 for married couples filing jointly. These thresholds have not been raised since 1997, despite substantial home price appreciation in many markets.

In New York’s 11th Congressional District, which covers Staten Island and parts of Brooklyn, the median home price is above $700,000, according to the congresswoman’s office. Longtime owners in high-cost markets increasingly risk hitting or exceeding today’s capital gains exclusion limit, especially if they bought decades ago at much lower prices.

“Too many seniors on Staten Island and in Brooklyn who purchased their homes decades ago and built equity over a lifetime are now facing the possibility of a significant capital gains tax bill if they choose to sell or downsize,” Malliotakis said in a statement. She said the bill is intended to remove a tax “barrier that discourages seniors from selling when they want to” and to make homeownership “more attainable for younger families and first-time homebuyers.”

Local real estate organizations and brokers backed the proposal in the congresswoman’s announcement, framing it as both a tax relief measure and a strategy to boost inventory. Trade groups including the Staten Island Board of Realtors and the Brooklyn Real Estate Board said the proposal could encourage “right-sizing” among seniors and unlock homes that have been effectively “frozen” due to tax concerns.

For housing professionals, the measure highlights a policy lever that directly affects listing decisions for older homeowners. In high-appreciation markets, tax exposure on gains above the current caps of $250,000 and $500,000 can be a key reason seniors stay in place rather than downsize or relocate, limiting available inventory for first-time and move-up buyers.

Malliotakis’ office positioned the bill within a broader push to address affordability for homeowners and seniors. The congresswoman has supported raising the state and local tax (SALT) deduction cap to $40,000. She also authored a “bonus senior deduction” in the Working Families Tax Cuts package, which provides an additional deduction of up to $6,000 for individuals and $12,000 for married couples ages 65 and older, according to the announcement.

Malliotakis is also a co-sponsor of H.R. 1340, the More Homes on the Market Act, which would double the current home sale capital gains exclusion to $500,000 for individuals and $1 million for married couples while indexing these amounts to inflation.

The Nest Egg Protection Act goes further by setting the exclusion at $1 million for both individuals and joint filers while targeting a narrower group — homeowners 65 and older who have owned their primary residence for at least 25 years.

Similar moves under the Trump administration

Modernized capital gains thresholds began to grab attention last summer when Rep. Marjorie Taylor Greene (R-Ga.) introduced the No Tax on Home Sales Act, which aimed to eliminate all capital gains taxes on the sale of a primary residence.

A release from Greene’s office at the time also explained that the limits hadn’t been updated since 1997, when the median U.S. home price was $145,000 — a number that had climbed to more than $360,000 in 2025.

Data published last year by the National Association of Realtors (NAR) showed that 29 million homeowners — or 34% — could face capital gains taxes when selling based on accumulated equity above the $250,000 exclusion cap. NAR projected the number to climb to 59 million (or 70% of all homeowners) by 2035.

President Donald Trump lent credibility to Greene’s proposal by saying that “we’re thinking about that,” while arguing that lower benchmark interest rates from the Federal Reserve could accomplish a similar goal of incentivizing home buyers and sellers. But the bill didn’t advance out of committee and Greene is no longer serving in Congress.

In January, Rep. Craig Goldman (R-Texas) introduced H.R. 7034, dubbed the Don’t Tax the American Dream Act, which would eliminate federal capital gains taxes on the sale of primary residences. That bill has also yet to advance out of committee.

“Americans are overtaxed. The Don’t Tax the American Dream Act repeals costly capital gains taxes on home sales so that Americans keep more of their hard-earned money,” Goldman said in statement. “Repealing these taxes will unleash the housing market and help restore the American Dream of homeownership.”

This article was written by Neil Pierson and generated with the assistance of HousingWire Automation. It was reviewed by a HousingWire editor before publication.