Rep. Craig Goldman (R-TX) has introduced the Don’t Tax the American Dream Act, which would eliminate federal capital gains taxes on the sale of primary residences for homeowners who have lived in the property for at least two years by removing existing dollar limits on exclusions.
The legislation, introduced in the House this week, amends Section 121(b) of the Internal Revenue Code to “eliminate the dollar limitations on the exclusion of gain from sales of principal residences.” Under current law, homeowners may exclude up to $250,000 (individual) or $500,000 (married filing jointly) in capital gains if they have lived in the home for at least two of the past five years. Those caps, however, have not been adjusted since 1997.
According to the bill text, the proposed changes would remove the dollar caps altogether, allowing all capital gains on eligible home sales to be excluded from federal taxation. The measure applies to sales and exchanges occurring after the date of enactment.
The bill stems from what Rep. Goldman described as “an incredible idea that came from a constituent,” he told Breitbart News in an exclusive interview. “I served 12 years in the Texas State House, and as I told every single individual and group that I met with, some of the greatest ideas I got when I passed legislation in Texas came from constituents,” he stated.
He recounted how a constituent and his wife had sold their home and were stunned by the tax bill they faced. “He had to pay enormous capital gains on it, and he said, ‘Why do we have such a law? Why do we punish people? Why can’t we save more of what we earn? I put all the equity in this house, and yet I got to hand a hunk of money over to the government, and that’s wrong.’ And so we looked into it, and I said, ‘I absolutely agree.’”
Rep. Goldman framed the bill as part of restoring homeownership’s role in the American Dream. “We’ve all been told from the day we’re born the American Dream is to own your own home,” he explained, emphasizing the pride and autonomy that comes with building equity. “There’s a sense of independence when you own a home and can make the changes you want.”
He asserted the current tax system undercuts that aspiration when homeowners are ready to sell. “It’s certainly not an American Dream to handle your money when you built that equity and made improvements on a home, and then it’s time to sell,” he remarked. For those upgrading or relocating for work, he added, “It’s not part of the American Dream to build up wealth, only to hand it over to the American government.”
Goldman maintained the bill aligns with Republican messaging priorities heading into the November 2026 midterm elections, saying the focus shouldn’t be just on “affordability” but also on the “housing crisis.” “We keep hearing there’s a housing crisis across America,” he noted. “And I think part of it is people who realize they want to sell their home, but they realize the capital gains they’re going to have to pay in order to do that.”
That hesitation, he contended, is directly affecting buyers. “The ability for others to then buy that home isn’t there,” he pointed out. He called it “a double-edged sword” that is holding back housing inventory: “When people look at what the capital gains could be if they do sell, they hesitate, or they decide absolutely not to do it.”
Looking ahead, Goldman expects the legislation to gain momentum as he begins to rally co-sponsors. “It’s a commonsense bill,” he said.
If enacted, Goldman believes the long-term effects would be significant: “I think the American dream will be that much more attainable. I think the housing market will skyrocket. I think it would only help Americans prosper.”
