New tax break and its effect on the housing market.

Potential Removal of Capital Gains Tax on Home Sales
​Trump has expressed support for eliminating capital gains tax on primary home sales, a move that would go beyond current exemptions of $250K/$500K per sale Wall Street Journal+15Barron's+15YouTube+15Forbes+6Reuters+6The Daily Beast+6.
Impact:

• Could encourage more homeowners to sell, increasing housing supply.
• May support more fluid market activity, especially for long-term owners hanging onto low-rate mortgages.

2. “One Big Beautiful Bill” & Opportunity Zones 2.0
The new tax bill (OBBBA), signed July 4, 2025, extends Trump’s 2017 tax cuts and incorporates key housing provisions Barron'sWall Street JournalWall Street Journal+4Investopedia+4Wikipedia+4. Notable elements include:

• Expanded Low-Income Housing Tax Credit (LIHTC) — a 12.5% increase intended to finance ~500,000+ affordable housing units by 2035 CNN.
• Increased SALT cap to $40K — benefits homeowners in high-tax states Newsweek+9CNN+9Investopedia+9.
• Opportunity Zones 2.0 — adds 30% capital gains tax breaks for rural real estate investments from 2027 AP News+2Wall Street Journal+2Wall Street Journal+2.
  Implications:
• Boosts incentives for affordable housing development.
• Stimulates rural and secondary-market investment.
• Encourages higher-end transactions in high-tax areas.

3. Build-Cost Pressures & HUD Funding Cuts
Trump’s proposal includes a 25% tariff on lumber and workforce reductions at HUD Politico. Meanwhile, the administration is proposing major cuts to HUD rental assistance programs Fortune+4Wall Street Journal+4AP News+4.
Consequences:

• Higher lumber costs could slow construction and reduce new housing starts.
• Cuts to Section 8 could destabilize the affordable rental market, dampening investor confidence in multifamily housing.

Summary of Housing Market EffectsOn Sellers & Buyers:

• Capital gains removal and expanded SALT deductions may unlock more listings.
• However, elevated mortgage rates and rising building costs may dampen activity.

On Developers & Investors:

• LIHTC and Opportunity Zone boosts improve affordability and rural development pipelines.
• Tariffs and HUD cuts could offset these gains, creating mixed incentives.

On Affordable Housing:

• Increased tax credit funding is positive.
• Funding cuts may disrupt project financing and viability.

Final TakeTrump’s tax measures aim to invigorate housing supply—especially through capital gains relief, tax credit expansion, and rural incentives. But rising material costs and reduced federal housing support may limit overall gains, resulting in a mixed policy environment. Strategic adaptation by developers, investors, and agents will be key in navigating the evolving landscape.