A change could move values through the supply channel, though nobody can predict whether it happens or how large the effect would be. Treat this as a lens on what could move supply, since any policy change here is speculation until it passes. Under current federal rules, a couple can exclude up to $500,000 of gain on the sale of a primary residence ($250,000 for a single filer). Those limits can change, so confirm the current rules with a tax professional. The key point: in high-cost coastal markets, long-time owners often have gains well past that exclusion, so selling would trigger a large tax bill. Some respond by simply not selling. They hold the property, sometimes in a trust, specifically to avoid the tax, and that behavior keeps homes off the market. Raise the exclusion and you could unlock inventory from exactly those owners. More supply reaching the market is one of the few things that puts real downward pressure on prices, arguably more than most factors people debate. The caveat is geography. The exclusion mostly bites in expensive markets where gains routinely blow past it. In lower-cost areas, where a typical gain sits under the exclusion anyway, a change would barely register. So the impact could be real but concentrated, if it happens at all.