Summary — S. 3332: More Homes on the Market Act

Status: Introduced in the Senate (read twice and referred to committee) — Introduced December 3, 2025; referred to Finance (and earlier references to committee actions in sponsor documents). Sponsors: multiple (bill text shows Senators including Cornyn; additional listed sponsors/cosponsors in the provided metadata).

Purpose
- To increase the tax-free exclusion of capital gain on the sale of a taxpayer’s principal residence and index those exclusions for inflation. The intent is to allow homeowners to exclude more gain from gross income when selling their homes, potentially encouraging turnover in the housing market.

Key provisions
- Raises the exclusion amounts in Internal Revenue Code §121(b):
- The current $250,000 exclusion for single filers is increased to $500,000.
- The current $500,000 exclusion for married filing jointly (or other joint rules) is increased to $1,000,000.
- Adds an inflation adjustment:
- For taxable years beginning after 2025, the $500,000 and $1,000,000 amounts will be annually adjusted for cost‑of‑living increases using the section 1(f)(3) CPI-based method (substituting 2024 for the prior base year). Adjustments are rounded to the next lowest $100.
- Effective date:
- The amendments apply to sales and exchanges occurring after the date of enactment.

Who would be affected
- Individual homeowners selling their principal residence:
- More of a seller’s capital gain would be excluded from federal taxable income, especially homeowners who realize gains above the current exclusion amounts.
- Married couples filing jointly gain a proportionally larger exclusion.
- The IRS and Treasury: administration, guidance, and enforcement of the adjusted amounts and indexing provisions.
- Broader housing market and federal budget:
- Potential behavioral effects (increased willingness to sell, influence on housing supply and pricing).
- Revenue impact: reduces taxable gains reported to Treasury, likely lowering federal income tax receipts to some degree (size depends on taxpayer behavior and market conditions).

Procedural/timeline notes
- Applies prospectively to sales after enactment; indexing begins for taxable years after 2025.
- At introduction, the bill was referred to committee; further congressional action (committee consideration, floor votes) would be needed for enactment.

Potential impacts to consider
- Tax relief for home sellers, especially in high-appreciation areas.
- Possible modest increase in housing market turnover if the larger exclusion reduces lock‑in effects (owners who previously held to avoid tax).
- Budgetary cost to federal revenues (uncertain magnitude).
- Distributional effects: benefits most to sellers realizing larger gains (often those in higher-value markets).

Related/companion measures
- Several related or prior-session bills and companion measures are noted (e.g., S. 6778, S. 916, A.258, H.R. 4856, H.R. 1340), indicating prior or parallel legislative efforts on similar changes.

This summary focuses on the principal tax changes in S. 3332 as provided: doubling the §121 exclusions for single and joint filers and making those exclusion amounts inflation‑adjustable beginning after 2025.