How NM REALTORS® Are Advocating for Capital Gains Reform

Many New Mexico homeowners—especially long-term owners and seniors—are feeling the pressure of a federal tax policy that hasn’t kept up with today’s housing market. But there’s good news: the National Association of REALTORS® (NAR), with strong support from our New Mexico Federal Political Coordinators (FPCs), is actively working to fix it.

The Issue: A 1997 Tax Rule Hurting Modern Homeowners

Under current law, homeowners can exclude up to $250,000 (single) or $500,000 (married) of capital gains on the sale of a primary residence. That rule hasn’t been updated since 1997—even as home prices have soared across the country.

As a result, homeowners who’ve simply stayed put and built equity—especially retirees or those looking to downsize—now face an unfair tax burden when it’s finally time to sell. This discourages them from listing their homes, reduces inventory, and hurts housing mobility for everyone.

New Research, Stark Reality

NAR recently commissioned new research, and the findings are eye-opening:

  • Nearly 29 million homeowners (34%) already exceed $250,000 in equity.
  • Over 8 million (10%) have gains above the $500,000 exclusion.
  • By 2030, more than 47 million homeowners could be impacted, with 20 million exceeding $500K.
  • By 2035, 70% of homeowners may face capital gains taxes, and 20 states will have over 40% of homeowners above the $500K threshold.

This problem isn’t going away—it’s accelerating.

The Solution: The More Homes on the Market Act

To address this, NAR is championing the More Homes on the Market Act, a proposed bill that would:

  • Double the capital gains exclusion
  • Adjust the thresholds for inflation moving forward
  • Help unlock inventory and restore fairness in the housing market
NM FPCs Step Up in Washington

While in Washington, D.C. for the 2025 REALTORS® Legislative Meetings, New Mexico’s Federal Political Coordinators met directly with:

  • Senator Martin Heinrich
  • Senator Ben Ray Luján
  • Congresswoman Melanie Stansbury
  • Congressman Gabe Vasquez
  • Congresswoman Teresa Leger Fernández

Our FPCs made a strong case for the urgent need to modernize this outdated tax policy—emphasizing its real impact on New Mexico homeowners and the housing market at large.

Next Steps

We’ll continue to monitor this important legislation and advocate for policies that protect homeownership and promote market fairness. In the meantime, we encourage members to read and share the full article featured on Realtor.com: How a Tax Rule From 1997 Is Hurting Today’s Homeowners—And What Could Be Done To Fix It

Thank you to our New Mexico FPCs for their leadership and to all members who support NAR’s efforts to keep homeownership a cornerstone of the American Dream.