Should I Wait to Sell My Franklin Home Until Congress Raises the Capital Gains Exclusion?

Why does a bill in Washington feel so personal in Franklin?

This question has come up at more kitchen tables this fall than I can count, and I understand why. A lot of my neighbors bought their homes ten or fifteen years ago and now have more equity than they ever imagined. When August’s headlines said Washington was talking about cutting the capital gains tax on home sales, it was natural to wonder whether to sit tight until something passes.

Franklin’s median sale price in September was $970,000, according to RealTracs MLS, so a long-time owner can be sitting right at, or past, the point where federal tax kicks in. That’s why it’s worth knowing the actual rules before a news cycle makes your decision for you.

How does the capital gains exclusion work today?

Under current federal law, you can exclude up to $250,000 of gain from the sale of your main home if you’re single, or up to $500,000 if you’re married and filing jointly, according to IRS Publication 523. To qualify for the full amount, you generally need to have owned the home and lived in it as your main residence for at least two of the five years before the sale, and you can’t have used the exclusion on another home sale in the past two years.

The part most people miss is how the gain is figured. The IRS starts with your sale price, subtracts your selling expenses, and then subtracts your adjusted basis, which is your purchase price plus certain closing costs and the cost of improvements that are still part of the home. A new roof, kitchen or HVAC system counts, while everyday repairs and painting don’t. Any gain above the exclusion is generally taxed at long-term capital gains rates of 0%, 15% or 20% depending on your income, according to the IRS, and some higher earners also owe the net investment income tax. Tennessee’s Hall tax was repealed for tax years starting in 2021, according to the Tennessee Department of Revenue, so the federal bill is the only income tax on that gain.

What would the proposed bills actually change?

The bill getting the most attention, the More Homes on the Market Act (H.R. 1340), introduced in February 2025, would double the exclusion to $500,000 for single filers and $1 million for married couples, then index those limits to inflation. It has bipartisan support in both chambers, according to Real Estate News, but it’s still in the House Ways and Means Committee without a markup or a vote. As written, the higher limits would apply to sales after the bill becomes law, not to sales that have already closed.

A second bill, the Nest Egg Protection Act (H.R. 9064), was introduced in June 2026 and would temporarily raise the exclusion to $1 million for homeowners 65 and older who’ve owned their main home for at least 25 years, according to the sponsor’s office. The Washington Examiner reported in August that the administration has also discussed larger changes. None of these proposals is law today, and there’s no way to know which version, if any, will pass or when.

Does waiting actually save a Franklin seller money?

Here’s a simplified, hypothetical example with round numbers. Say a married couple bought their Franklin home in 2013 for $450,000 and put $75,000 into a new kitchen and a new roof, giving them a basis of $525,000. If they net $1,100,000 after selling costs, their gain is $575,000. Under today’s rules the first $500,000 is excluded, which leaves $75,000 taxable, or about $11,250 at the 15% rate most people pay. If H.R. 1340 became law as written before they sold, that $11,250 would go away.

That’s real money, and for some sellers it’s much bigger. It’s also the number to weigh against everything else that can move while you wait: your home’s price, the price of your next home, mortgage rates, and your own life, which doesn’t pause for Congress. And if your gain is already under $250,000 or $500,000, waiting saves you nothing at all, because today’s exclusion already covers you. Your numbers will be different, so treat this as a starting point for a conversation with your CPA, not tax advice.

What should you do before deciding to wait?

Start by finding your real number. Pull your purchase closing statement, gather improvement receipts, and ask your CPA to estimate your gain and what you’d owe under current law. Once improvements are counted, many sellers find the gain is smaller than they feared.

Then look at the market you’d actually be selling into. In September, Franklin had 5.16 months of supply and 44 days on market, according to RealTracs MLS, and Redfin reported that 30.3% of Franklin homes had a price drop in August. In that market, preparation and pricing can easily be worth more than a tax change that may never come. And if you’re ready for your next chapter, your own timing deserves as much weight as Washington’s.