As a Realtor serving buyers and homeowners in Napa, Sonoma and Solano counties, I see firsthand how difficult it has become for families to find a home they can afford. Limited inventory means buyers have fewer choices, face more competition and, in many cases, are forced to delay homeownership or leave the communities where they work and have built their lives.

There is no single solution to our housing challenges, but Congress can take a practical step that could help put more existing homes on the market: modernize the federal capital gains tax exclusion on the sale of a primary residence.

The current exclusion — $250,000 for individuals and $500,000 for married couples filing jointly — was established in 1997 and has never been updated.

The housing market has changed dramatically since then. Home prices have risen substantially, yet the tax exclusion has remained frozen for nearly three decades.

For homeowners who have lived in their homes for many years, the prospect of a significant federal tax bill can become a factor in deciding whether to sell.

That creates what economists call a capital gains “lock-in” effect (not to be confused with the mortgage rate lock-in effect).

A homeowner who might otherwise sell and move to a smaller home, relocate for a job, accommodate a growing family or address changing family circumstances may instead decide to stay.

When that happens, the impact extends beyond one homeowner. One home that doesn’t come onto the market is one less opportunity for another family.

In a region like the North Bay, where housing supply is already constrained, those individual decisions can add up.

Congress should modernize the exclusion by doubling it to $500,000 for individuals and $1 million for married couples.

This would not eliminate capital gains taxes on home sales. It would simply update a nearly 30-year-old threshold so that more homeowners can sell without facing an unexpected tax liability on gains below the new limits.

Importantly, this isn’t simply about helping existing homeowners.

More inventory can mean more choices for buyers. It can help first-time buyers compete for homes and give growing families more opportunities to move within the communities they call home.

The proposed change is also a reasonable modernization of an outdated policy. If the original exclusion had simply kept pace with the increase in home prices since 1997, the thresholds would be substantially higher today.

The proposed $500,000 and $1 million limits represent a practical effort to bring the policy closer to today’s housing market.

As a North Bay Realtor, I believe we should pursue every reasonable opportunity to increase housing mobility and unlock existing inventory.

That is why I am urging Congressman Mike Thompson, who represents Napa and Sonoma communities, to support legislation to modernize the federal capital gains exclusion.

Housing affordability is a complicated challenge that will require many solutions. But sometimes progress starts with fixing a policy that hasn’t kept pace with reality.

For North Bay homeowners and prospective buyers alike, updating this outdated tax policy could help put more homes on the market—and give more families a chance to find the right home at the right time.

Curtis Stocking is a Solano County real estate broker specializing in agricultural and rural properties throughout Northern California. He is a former president of the Northern Solano County Association of Realtors and was ranked the No. 1 United Country Real Estate agent nationwide from 2016 to 2025.