Amid the U.S. housing shortage, some lawmakers want to reduce capital gains taxes on home sales. But experts disagree on whether this idea could help tackle the country’s home affordability crisis.
Sens. Ted Cruz, R-Texas, and Tim Scott, R-S.C., this week sent a letter to Treasury Secretary Scott Bessent, urging him to use his executive authority to reduce capital gains taxes by indexing an asset’s “basis,” or purchase price, with inflation.
Under current law, investors pay capital gains tax on the difference between an asset’s basis and its sales price. But the lawmakers want the Treasury to index the basis to inflation to reflect its price in today’s dollars, according to the letter, which CNBC reviewed.
Cruz and Scott said the tax break could incentivize long-time property owners with significant equity to sell. The change would “increase the supply of homes available to young families seeking to purchase their first property,” the lawmakers wrote.
The U.S. housing supply gap — the difference between existing stock and homes needed — reached an estimated 4.03 million homes in 2025, Realtor.com reported on Tuesday. That’s up from 3.8 million in 2024.
