Trump May Eye Cuts to Capital Gains Tax for Home Sellers, Official Says

President Donald Trump may be interested in a change to the capital gains tax for home sellers, a senior administration official has suggested.

National Economic Council Director Kevin Hassett told "Fox Business" on Wednesday afternoon the president is considering the issue. Changing the capital gains tax scheme has found support in Congress and from some housing advocates.

Hassett made the remarks after "Fox Business" host Larry Kudlow cited polling data from McLaughlin & Associates last month that showed 62% of voters approved of indexing the capital gains for inflation.

Trump "understands that you don't run on the rear-view mirror," Hassett said. "You run on what you're going to do."

Kudlow, who led the National Economic Council under the first Trump administration, said he's supported the idea for "50 years."

"I spoke to him, he liked the idea of the indexing, he liked the idea of a bigger exemption," Kudlow said. "These are not necessarily rich people. These are empty nesters who owned a house for 30 or 40 years."

Hassett has gone public with a few other ideas, including, in January, that the administration was considering allowing Americans to pull from 401(k) accounts for a down payment on a home. Trump later distanced himself from the idea.

What is the capital gains exclusion?

The current code, set in 1997, taxes profits from home sales at up to 20%, if they exceed the limit of $250,000 for single people and $500,000 for joint filers.

Because the capital gains tax exclusion wasn't tied to inflation, many more homeowners today face a tax hit than they would have three decades ago. Typically, the longer they own the home, the larger the bill.

The More Homes on the Market Act, a bill to double the current exclusion limits to $500,000 for single filers and $1 million for married couples filing jointly, while indexing both thresholds to inflation going forward, has brought over 170 co-sponsors in Congress.

But it's an expensive proposition. A congressional analysis from last year estimated such a change could deprive the government of $46.4 billion in tax revenue.

Kevin Brown, president of the National Association of Realtors®, lobbied for the law as he spoke to a panel in Congress in June. He and other NAR leaders argue the bill should be a major priority as both parties target an affordability message ahead of the midterms.