H.R. 10883: American Home Mobility Act

This bill would change federal tax rules for certain home swaps. Right now, like-kind exchanges under Section 1031 of the tax code generally let people defer taxes when they exchange certain investment or business real estate for similar property. This bill would expand that rule to cover some exchanges of principal residences.

What the bill would allow

If a person has owned and used a home as their main residence for at least part of the past 30 years, they could exchange that home for another piece of like-kind real estate that will also be used as their main residence, and not immediately recognize gain or loss for tax purposes. In simple terms, this means the tax on any increase in value could be postponed rather than paid right away.

How it would work

• The exchanged property must be real estate of the same general type, under the existing “like-kind” rules.
• The home being given up must have been the taxpayer’s principal residence at some point during the prior 30 years.
• The replacement property must be intended to be used as the taxpayer’s principal residence.
• The tax deferral would apply only to exchanges completed after December 31, 2026.

What it does not do

The bill does not broadly eliminate taxes on home sales. It only creates a new tax-deferral option for qualifying exchanges. It also does not change the general tax rules for most ordinary home sales, except to the extent they involve this specific exchange structure.

Practical effect

The main effect would be to give certain homeowners more flexibility to move without immediately triggering capital gains tax, if they can structure the move as a qualifying like-kind exchange. This could be relevant for people downsizing, relocating, or changing homes while keeping their housing equity invested in real estate.

Relevant Companies

None found