More than one in four (25.9%) U.S. homes have gained at least $250,000 in value since the last time they were purchased, while 8% have gained more than $500,000, according to a new report from Redfin, the real estate brokerage powered by Rocket.
These are the upper and lower bounds of the potential share of homeowners who stand to benefit if the tax on capital gains from a home sale is eliminated—an idea currently being floated by President Donald Trump and lawmakers.
“If the Fed would lower the [interest] rates, we wouldn’t even have to do that,” Trump told reporters on July 22, according to CNBC. “But we are thinking about no tax on capital gains on houses.”
Under current law, home sellers can face capital gains taxes once profits exceed $250,000 for single filers or $500,000 for married couples filing jointly.
As home values increase, certain individuals, such as longtime homeowners, are more likely to exceed the $250,000 and $500,000 thresholds, which could trigger capital gains taxes, experts say.
When home sales profits exceed $250,000 or $500,000, capital gains are levied at 0%, 15%, or 20%, depending on taxable income. Excess profit above those thresholds can also trigger the so-called net investment income tax of 3.8%, depending on other investment earnings, according to the IRS.
Some 29 million homeowners (34%) could exceed the $250,000 threshold for single filers, and 8 million (10%) could be above the $500,000 limit for married couples filing jointly, according to a 2025 study from the National Association of Realtors. The organization has long advocated for capital gains reform for home sales.
According to the Redfin report, of the homes that have increased at least $250,000 in value, the median gain is $384,606—representing a potential tax liability of $20,104 (using a 15% tax rate). For homes that have gained at least $500,000 in value, the median gain is $712,986—a potential tax liability of $31,948.
| U.S. Homes Potentially Impacted by Capital Gains Tax on Home Sales | ||||
| Share of U.S. homes | Median capital gain | Tax liability on median capital gain (using 15% tax rate) | Median home value (Redfin Estimate) | |
| Homes that have gained $500,000+ | 8% | $712,986 | $31,948 | $1,229,076 |
| Homes that have gained $250,000+ | 25.9% | $384,026 | $20,104 | $720,111 |
| Overall | N/A | $144,543 | $0 | $385,700 |
This is according to an analysis of the current Redfin Estimate for U.S. homes, compared to their most recent sale price. The analysis provides a high-level estimate of who may benefit from a change in capital gain tax rules on home sales. However, Redfin notes that “tax rules are complex and every homeowner’s circumstances are unique.”
The typical U.S. home has gained $144,543 in value since it was last purchased, meaning owners wouldn’t owe any capital gains tax if they sold it today.
However, a couple who sells their primary residence for $700,000 more than they paid for it 10 years ago would potentially owe capital gains tax on $200,000—the amount above the $500,000 exclusion for couples filing jointly. Using a 15% capital gains tax rate, that would project as a potential $30,000 tax bill. (Note: Redfin’s analysis doesn’t take into account how home improvement costs and other offsets can also potentially reduce homeowners’ capital gains tax burden.)
Homeowners in California, Hawaii, and Massachusetts could benefit the most
The biggest potential beneficiaries of the capital gains tax being eliminated are homeowners who have already built considerable wealth through their property, and they mainly come from states where home prices are high and have increased quickly.
That starts with California—where the median home value is $766,896 and the typical capital gain of all homes is $332,659, according to Redfin. Looking closer, 62.3% of Californian homes have gained at least $250,000 since they were last sold—the highest share of any state. One in three (33%) have gained more than $500,000.
| States With Highest Share of Homes Above Capital Gains Thresholds | ||||
| Median home value (Redfin Estimate) | Share of homes that have gained $250,000 in value since they were purchased | Share of homes that have gained $500,000 in value since they were purchased | Median capital gain (all homes) | |
| California | $766,896 | 62.3% | 33% | $332,659 |
| Hawaii | $834,015 | 61% | 34.6% | $338,346 |
| Massachusetts | $648,604 | 58.4% | 20.8% | $291,011 |
| Washington | $621,091 | 54.1% | 19.4% | $270,412 |
| New Jersey | $610,210 | 52.2% | 15.4% | $260,587 |
California homes are more likely to exceed capital gains thresholds partly because homes are more expensive there to begin with. Strong job markets and desirable climates have long kept demand high in multiple areas of the state—pushing the median price of homes over $1 million in metros like Los Angeles and San Francisco. On top of that, California’s Proposition 13—which can lock owners into low property-tax rates—has been a barrier for people to sell their homes. That means Californian homeowners typically stay in their homes longer than in other areas of the country, giving them more time to increase the size of their capital gain.
Compared to California, Hawaii has a slightly lower share of homes that have gained more than $250,000 in value (61%) but a slightly higher share of homes that have gained $500,000 (34.6%) and a higher overall median capital gain ($338,346).
Massachusetts (58.4%), Washington (54.1%), and New Jersey (52.2%) round out the top five states with the highest share of homes that have gained at least $250,000 in value since they were last sold.
More than one in five (20.8%) homes nationally that have gained over $250,000 in value are from California—the highest share from any state. Next came Florida (12.1%), Massachusetts (7%), Washington (6.9%), and New Jersey (4.8%). California also has more than a third (35.6%) of homes nationally that have gained over $500,000 in value.
“A lot of baby boomers say they never plan to sell their homes—but that mindset could shift if capital gains are taken off the table,” Redfin Chief Economist Daryl Fairweather said in a statement. “With the financial barrier removed, more may decide to sell and either downsize or relocate, potentially freeing up housing inventory and putting downwards pressure on home prices. But it’s important to note that these homes are not starter homes, they are more likely to be million-dollar homes that are out of reach for most homebuyers. The impact of the tax break would also not be felt nationwide—it would disproportionately benefit wealthier homeowners from coastal states like California. Some states, especially in the South and Midwest, would see far less impact.”
Homeowners in Mississippi, North Dakota, and Iowa would benefit the least
In Mississippi, where the median home value is $254,319, only 1.2% of homes have gained $250,000 in value since they were last sold and just 0.1% have gained $500,000. Those are the lowest shares among all states, according to Redfin. Put a different way, only one out of every 100 Mississippi homes has gained enough value to cross the capital gains tax threshold for single filers, and virtually no homes have crossed the threshold for couples.
| States With Lowest Share of Homes Above Capital Gains Thresholds | ||||
| Median home value (Redfin Estimate) | Share of homes that have gained $250k in value | Share of homes that have gained $500k in value | Median capital gain (all homes) | |
| Mississippi | $254,319 | 1.2% | 0.1% | $78,161 |
| North Dakota | $308,628 | 2.2% | 0.1% | $82,962 |
| Iowa | $238,295 | 2.4% | 0.3% | $68,697 |
| Oklahoma | $228,002 | 3.1% | 0.4% | $84,164 |
| Wyoming | $321,499 | 3.4% | 0.2% | $80,060 |
North Dakota, Iowa, Oklahoma, and Wyoming round out the five states with the lowest share of homes that have gained enough value to trigger the capital gains tax.
Nine out of 10 homes in Anaheim have gained more than $250,000 in value
Californian markets dominate the list of major metros where homeowners would benefit most from a repeal of the capital gains tax, taking the top six positions.
In Anaheim, incorporating much of Orange County, south of Los Angeles, nearly nine out of 10 (89.4%) homes have gained more than $250,000 in value since they were last sold. That’s the highest share among the top 50 most populous U.S. metro areas.
| Major Metros With Highest Share of Homes Above Capital Gains Thresholds | ||||
| Median home value (Redfin Estimate) | Share of homes that have gained $250k in value | Share of homes that have gained $500k in value | Median capital gain (all homes) | |
| Anaheim, CA | $1,244,988 | 89.4% | 68.1% | $681,538 |
| San Jose, CA | $1,655,606 | 85.5% | 71.3% | $851,052 |
| San Diego, CA | $967,998 | 80.4% | 50.3% | $502,777 |
| Los Angeles, CA | $913,534 | 80.3% | 49.5% | $496,162 |
| San Francisco, CA | $1,572,937 | 77.7% | 63.2% | $704,305 |
| Oakland, CA | $989,490 | 72.8% | 45.1% | $453,400 |
Next comes San Jose, where 85.5% of homes have gained at least $250,000 in value and 71.3% of homes have gained at least $500,000—the latter share leading all major metros. The median capital gain in the tech-driven Bay Area metro is $851,052, also the highest among the major metros.
San Diego, Los Angeles, San Francisco, and Oakland round out the top six metros.
In Detroit, only 5.1% of homes have gained $250,000 in value since they were last sold, with just 0.4% having gained $500,000—the lowest shares among major metros.
| Major Metros With Lowest Share of Homes Above Capital Gains Thresholds | ||||
| Median home value (Redfin Estimate) | Share of homes that have gained $250k in value | Share of homes that have gained $500k in value | Median capital gain (all homes) | |
| Detroit, MI | $224,349 | 5.1% | 0.4% | $84,733 |
| Philadelphia, PA | $254,798 | 6.3% | 0.9% | $108,271 |
| Indianapolis, IN | $299,786 | 7.2% | 0.7% | $113,031 |
| San Antonio, TX | $305,604 | 7.4% | 0.9% | $87,388 |
| Cleveland, OH | $253,142 | 8.4% | 0.7% | $110,273 |
Next comes Philadelphia, Indianapolis, San Antonio, TX, and Cleveland.
Single-family homes more likely to have gained enough value to trigger capital gains tax
Owners of single-family homes are more likely than owners of other property types to benefit if the capital gain tax was removed, with 28% having gained at least $250,000 in value and 8.6% having gained at least $500,000.
| Share of homes that have gained $250k in value | Share of homes that have gained $500k in value | Median capital gain (all homes) | |
| Single Family | 28% | 8.6% | $153,683 |
| Condo/Co-op | 13.6% | 3.7% | $99,435 |
| Townhouse | 15% | 3% | $122,964 |
In comparison, 15% of townhouses and 13.6% of condos have gained $250,000 in value since last sold.
To view the full report, including charts and additional metro-level data, visit: https://www.redfin.com/news/capital-gains-2025.
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