A House proposal introduced this summer would sharply raise the amount of home-sale profit that older homeowners could keep free of federal capital-gains tax, lifting the shelter to as much as $1 million for those who have owned their homes the longest. The measure, styled the Nest Egg Protection Act, responds to a tax break that has not been updated in nearly three decades even as home values have multiplied. It is a proposal, not a law: the bill has been introduced and would need to clear committee, pass both chambers and be signed before any homeowner could claim the larger exclusion. Its conditions are also narrower than the headline number suggests.
What the Nest Egg Protection Act would do
Representative Nicole Malliotakis, a New York Republican, introduced the bill, designated H.R. 9064, on June 1, 2026. According to her office, the legislation would temporarily increase the capital-gains exclusion on the sale of a primary residence to $1 million for individuals and married couples aged 65 or older. To qualify, a homeowner would have to have owned the primary residence for at least 25 years, and the enhanced exclusion would apply to sales occurring from 2027 through 2030.
Those conditions matter as much as the dollar figure. The proposal would not reach a homeowner who bought recently, nor one under 65, nor sales outside the four-year window it defines. It targets a specific profile: a long-tenured older owner sitting on decades of appreciation. The bill’s sponsor has framed it as relief for people who did everything the system encouraged — bought a home, paid it off and stayed — only to face a large tax bill if they try to downsize.
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Why the current exclusion feels outdated
Under existing law, an individual may exclude up to $250,000 of gain from the sale of a primary residence, and a married couple filing jointly may exclude up to $500,000. Any profit above those amounts is subject to capital-gains tax. Those thresholds were set in 1997 and have never been adjusted for inflation or for the run-up in housing prices since.
The gap between the 1997 caps and today’s home values is the engine behind the proposal. In high-cost markets, a house bought decades ago for a modest sum can now carry a gain well beyond $500,000, meaning a couple could owe capital-gains tax on hundreds of thousands of dollars of paper profit built up simply by staying put. The sponsor’s district, where she says the median home price tops $700,000, illustrates the squeeze on longtime owners who are, in effect, taxed on the appreciation of the roof over their heads when they finally sell.
The housing-supply argument behind the bill
Supporters cast the measure as more than a tax cut for older owners; they argue it could loosen a frozen housing market. The reasoning is that some longtime owners stay in homes larger than they need because the tax cost of selling is too steep, keeping those properties off the market. Reducing that tax barrier, the argument goes, would encourage more of them to sell and downsize, adding inventory for younger families and first-time buyers.
Real estate figures quoted in the sponsor’s announcement echoed that view, describing longtime homeowners as effectively “frozen” in place by the prospect of a capital-gains bill. Coverage of the bill in the housing trade press has framed it the same way — as a potential nudge to inventory as much as a break for seniors. Whether the effect would materialize at scale is untested, and the proposal’s temporary four-year window would limit how long any such nudge could last.
Where the proposal stands, and what could change
The central caveat is that none of this is in effect. H.R. 9064 has been introduced and referred in the House, and it would have to advance through the legislative process to become law. As a stand-alone bill it faces the same long odds that most tax proposals do, and it is one of several competing measures addressing the home-sale exclusion. The sponsor is also a cosponsor of a separate bill, H.R. 1340, the More Homes on the Market Act, which would instead double the current exclusion to $500,000 for individuals and $1 million for couples and index future amounts to inflation, without an age or tenure requirement.
The existence of multiple approaches signals that lawmakers agree the 1997 thresholds are dated but have not settled on a fix. For an older homeowner weighing a sale, the practical reality is that today’s $250,000 and $500,000 exclusions remain the law, and any planning has to rest on those numbers rather than on a proposal that could be amended, folded into a larger tax package or never taken up at all. What the Nest Egg Protection Act shows is where part of Congress would like the policy to go — not where it is.
This article was researched and drafted with the assistance of artificial intelligence.
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