Rep. Mace proposes legislation to waive capital gains taxes on principal home sales

A new bill sponsored by Rep. Nancy Mace in the House of Representatives would provide tax relief for homeowners by allowing certain capital gains from home sales to be excluded from taxation, the U.S. Congress reports.

Named H.R.7400, this legislation was brought forward on Feb. 5, 2026, in the 119th Congress’ 2026 regular session. Below is our analysis drawing on the official bill text and clarifying its implications as needed.

The proposed measure would alter the Internal Revenue Code of 1986 by fully excluding capital gains from the sale of a main residence or from properties sold to first-time homebuyers. By eliminating previous dollar caps on the tax break, the bill aims to simplify eligibility for those looking to reduce taxes when selling their homes. It specifies that a “first-time homebuyer” is defined as someone who hasn’t owned a principal residence in the three years before selling or exchanging a property. The changes are set to impact transactions completed after the bill becomes effective as law, with a goal to lower transaction costs and promote home ownership by easing the tax load on sellers.

Rep. Nancy Mace (Republican-SC-1st District) put forth the bill, joined by Rep. Lauren Boebert (Republican-SC-4th District) as a co-sponsor.

During the ongoing congressional session, Rep. Mace has introduced 65 additional bills.

Bills in Congress may originate in either the House of Representatives or the Senate, except measures related to revenue, which must be introduced in the House. Once introduced, each bill is assigned to committee for examination, which includes potential hearings, proposed changes and debate before advancing to chamber votes. If both chambers approve an identical version, the bill proceeds to the president for a decision to either sign it into law or veto it. Each two-year congressional term is sequentially numbered and has two annual sessions. The official record of legislation and progress is available through Congress and Congress.gov.

Nancy Mace represents South Carolina and has served in Congress since January 3, 2021, covering the 117th Congress and the two following Congresses. Her prior public service includes a term in the South Carolina House from 2018 to 2020 and a U.S. Senate run in 2014 that was not successful.

Mace earned a B.A. from The Citadel in 1999, completed an M.S. at the University of Georgia in 2004, attended Trident Technical College, and graduated from Stratford High School in 1995.