WATCH: Trump says he's considering 'no tax on home sales' proposal

(The Center Square) – President Donald Trump said Tuesday that he's considering allowing homeowners to sell their homes without paying federal capital gains tax on the profits.

The president's comments on Tuesday came during an Oval Office meeting with President of the Republic of the Philippines Ferdinand R. Marcos Jr. A reporter asked Trump about the proposal to help the U.S. housing market.

"Well, we're thinking about that," Trump responded. "But it would also unleash it just by lowering the interest rate."

Trump has pushed Federal Reserve Chairman Jerome Powell to lower interest rates. The Fed has taken a wait-and-see approach on interest rates, citing the president's tariffs.

In June, the Federal Open Markets Committee kept the central bank's federal funds rate at a target of 4.25% and 4.5%. Trump wants the rate to be 1%.

"If the Fed would lower the rates, we wouldn't even have to do that, but we are thinking about no tax on capital gains on houses," Trump said Tuesday.

Earlier this month, U.S. Rep. Majorie Taylor Greene, R-Ga., introduced "The No Tax on Home Sales Act," which would eliminate the federal capital gains tax on home sales if the home is the seller's primary residence.

Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors, said outdated capital gains rules hitting American homeowners, and not just the wealthy.

"We welcome any serious proposal that addresses the outdated capital gains thresholds hurting American homeowners," she told The Center Square. "This is no longer just a concern for high-end properties. NAR's research shows nearly 29 million homeowners, roughly one-third of the market, already face potential capital gains taxes if they sell, and that number is expected to climb sharply over the next decade. By 2035, nearly 70% of homeowners could exceed the $250,000 cap, including many middle-class families who've simply owned their homes for a long time in fast-growing markets."

McGahn said the tax burdens essentially lock in older homeowners.

"These tax burdens create a 'lock-in effect', especially for seniors, discouraging people from selling and keeping much-needed homes off the market," she said. "That's why NAR supports efforts like the More Homes on the Market Act and the No Tax on Home Sales Act that are helping move this conversation forward. This is not about speculation, it's about fairness. A homeowner shouldn't be taxed like an investor. This is about protecting equity and helping the entire market function more efficiently. President Trump's comments reflect growing momentum for reform, and we're encouraged to see this issue gaining attention at the highest levels."

Trump has promised to end taxes on tips, overtime and Social Security income. The GOP-led One Big Beautiful Bill Act included provisions that allow workers to deduct tip wages and overtime from their taxes, but both come with limitations and caveats. As does Trump's promise not to tax Social Security income. The OBBBA gives seniors an additional $6,000 deduction on their federal income taxes between 2025 and 2028. Joint filers get twice that amount. The benefit begins to phase out for single taxpayers making more than $75,000 and married couples earning $150,000. Those who earn more than $175,000 and couples earning more than $250,000 don't qualify.

The National Association of Realtors, a powerful lobby group, has called for changes to how homeowners pay capital gains taxes.

Under existing tax law, homeowners can exclude up to $250,000 in capital gains from the sale of a primary residence if they file as single, or up to $500,000 for married couples filing jointly. Congress hasn't changed the caps since 1997 despite steady gains in home prices.

"A capital gains cliff is coming for the middle class, and we have the data to prove it," McGahn told the Advocacy Scoop podcast in June.

According to the study, 34% of homeowners could already have enough home equity to exceed the $250,000 cap, and more than 10% could have enough to surpass the $500,000 threshold. Those numbers are projected to climb rapidly in the coming years, according to a NAR report.

Trump did not discuss how he'd pay for such a proposal. If Greene's bill passes, the federal government could see a significant decrease in revenue. The Congressional Budget Office has not evaluated the cost of Greene's proposal.