Texas Congressman Craig Goldman (R-Fort Worth) has introduced legislation aimed at boosting the stagnant housing market. Goldman last week filed the Don't Tax the American Dream Act, which would eliminate the capital gains tax for homeowners who have owned their home for more than two years. Goldman told The Texan the bill is not only about helping the housing market, but also basic fairness. "If you take the time, effort, and energy to build equity in your home, you should keep the money and the capital gains, not the federal government," he said.
The housing market has been slumping for the last couple of years due mostly to rising prices that have kept buyers on the sidelines and rising interest rates that have kept sellers holding on to their current mortgage. That is where this legislation could help. "Unlocking the housing market and adding some additional supply to the market should make it easier for a lot of people to buy houses," says Mitch Kramer, financial planner. "Because right now there is a shortage of affordable houses, and a lot of people don't want to sell because of the tax hit."
Goldman told The Texan he filed the legislation after hearing a constituent say he changed his mind about selling his home because of the capital gains tax. Still, Kramer believes this may lead to unintended consequences. "Housing prices have had tremendous appreciation over the last four to five years, so that means people who sell will have to pay a lot more for the house they move into," he tells KTRH. "So the offset of not paying the tax, is that going to be enough to cause people to sell?"