Bill Overview
Title: More Homes on the Market Act
Description: This bill increases the tax exclusion of gain from the sale of a principal residence and requires an annual inflation adjustment to such increased amount.
Sponsors: Rep. Panetta, Jimmy [D-CA-20]
Target Audience
Population: Homeowners globally
Estimated Size: 82000000
- The bill increases the tax exclusion on gains from the sale of a principal residence, potentially affecting all homeowners who sell their homes.
- Homeowners in countries or regions following a similar tax framework or have real estate markets influenced by U.S. trends might be indirectly affected.
- Tax adjustments related to real estate can have a broad impact on housing markets, affecting affordability and purchasing decisions globally.
Reasoning
- The More Homes on the Market Act targets U.S. homeowners who are selling their homes. Given the budget constraints and target population, the policy's immediate impact will likely be limited to homeowners with higher than average gains from home sales.
- This simulation includes individuals from various regions of the U.S. to reflect different real estate markets which may be differently affected by the policy.
- We included a range of ages, occupations, and family situations to show how the policy affects those in different life stages and financial situations.
- While not all homeowners will be selling or have significant capital gains, the policy could foster an overall positive sentiment about property investment.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- This policy makes selling a home more attractive and could motivate us to upsize sooner than planned.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired (Miami, FL)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This change would greatly help in maximizing our retirement savings, allowing more financial freedom in our old age.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Realtor (Austin, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- This policy could heat up the market temporarily, potentially making it harder to buy for first-time homeowners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Factory Worker (Detroit, MI)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 8/20
Statement of Opinion:
- This policy won't affect me much; local home prices haven’t appreciated significantly anyway.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retired (Phoenix, AZ)
Age: 70 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- This policy will help liquidate my property efficiently, supporting my retirement community costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Tech Startup Founder (Seattle, WA)
Age: 28 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- Concern that the bill might create an artificial surge in prices, affecting first-time buyers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Investment Banker (New York, NY)
Age: 39 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- This could lead to lucrative opportunities to cash in on appreciated properties more lucratively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 10 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Teacher (Denver, CO)
Age: 47 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- Potential relief when I decide to sell, but not impactful immediately.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
University Professor (Boston, MA)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 4.0 years
Commonness: 6/20
Statement of Opinion:
- This could make selling this year more favorable than planned, potentially boosting my retirement fund.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Event Planner (Las Vegas, NV)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.5 years
Commonness: 4/20
Statement of Opinion:
- The policy provides some comfort in potentially improving financial outcomes from selling my home.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $2500000000 (Low: $2000000000, High: $3000000000)
Year 2: $2550000000 (Low: $2050000000, High: $3050000000)
Year 3: $2601000000 (Low: $2100000000, High: $3100000000)
Year 5: $2706000000 (Low: $2200000000, High: $3200000000)
Year 10: $2960000000 (Low: $2400000000, High: $3500000000)
Year 100: $6408000000 (Low: $5000000000, High: $7000000000)
Key Considerations
- The policy would increase government revenue losses due to higher tax exclusions, affecting federal budgets.
- The demographic of homeowners who can effectively utilize this tax exemption, often those with significant home value appreciation, can concentrate benefits among middle to higher-income households.
- Long-term housing market impacts depend on general market conditions and housing supply dynamics, which could change if more homes are sold.