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Could This Tax Change Unlock Bergen County Homes?
A proposed federal tax change could make it easier for longtime Bergen County homeowners to sell, downsize, or make a move. Here’s what you should know.
For many Bergen County homeowners, their home is their largest financial asset. After decades of appreciation, however, selling can raise an important question: How much of that gain could be subject to capital gains tax?
That’s why the proposed More Homes on the Market Act is getting attention.
What Is the More Homes on the Market Act?
Under current federal law, eligible homeowners can generally exclude up to $250,000 of gain when filing individually or $500,000 for married couples filing jointly when selling a primary residence. Certain ownership and residency requirements apply.
The proposed More Homes on the Market Act (H.R. 1340 and S. 3332) would double those exclusions to:
$500,000 for individual filers
$1 million for married couples filing jointly
The amounts would also be indexed to inflation going forward.
Importantly, the bill is not yet law. It remains under consideration in Congress.
Why Could This Matter in Bergen County?
Bergen County has many longtime homeowners who purchased their properties decades ago, when home
prices were significantly lower. A home purchased for several hundred thousand dollars may now be worth $1 million or more.
For example, a married couple who purchased a home for $500,000 and sells it for $1.5 million could have a $1 million difference before accounting for eligible improvements, selling expenses and other factors that affect taxable gain.
Under today's $500,000 exclusion, some of that gain could potentially be taxable. Under the proposed legislation, the exclusion would increase to $1 million.
For some homeowners, that could make the decision to sell or downsize financially easier.
Could It Bring More Homes to Market?
That's one of the goals behind the legislation.
A longtime homeowner may want to downsize, relocate, move closer to family, or transition to a lower-maintenance home—but potential capital gains taxes can factor into that decision.
If the proposed increase reduces that financial barrier, more homeowners could choose to sell. In a Bergen County market where inventory remains a challenge for buyers, even a modest increase in available homes could create more opportunities.
For buyers, that could mean more choices and less competition for the limited number of homes that currently come to market.
What Should Bergen County Homeowners Do Now?
The bill is still only a proposal, so homeowners shouldn't make decisions based on legislation that hasn't passed.
Instead, if you're considering selling, start by understanding your current financial picture:
What did you originally pay for your home?
What major improvements have you made?
What is your home worth today?
Would you qualify for the current capital gains exclusion?
What would your next move look like?
A professional home valuation by a Gill Group listing expert can help you understand your potential equity and what a sale could make possible. If you have significant potential gains, it's also important to speak with your CPA or tax advisor about your individual situation.
The Bottom Line
The More Homes on the Market Act is worth watching, particularly for longtime Bergen County homeowners with substantial appreciation in their properties. If passed, the higher exclusion could make it easier for some homeowners to sell, downsize or relocate—and potentially bring more inventory to the market.
If you're wondering what your Bergen County home could be worth today, The Gill Group can provide a current home value evaluation and help you understand your options.Give us a call at 201-888-2900 to get started. From there, you can work with your financial and tax professionals to determine what makes the most sense for you.
