Should I Sell My McKinney Home Now, or Wait to See if Congress Raises the Capital Gains Exclusion Cap in 2026?

Should I sell my McKinney home now, or wait to see if Congress raises the capital gains exclusion cap in 2026? For most McKinney, TX sellers, selling based on current, known tax rules beats gambling on a legislative change that may never happen or may not pass in the form you expect.

If you've owned your home for a while, especially in an appreciating pocket of Collin County, you may be sitting on more equity than the current $250,000 (single) or $500,000 (married filing jointly) capital gains exclusion covers. That's a real concern, and it's understandable to want to time your sale around a possible policy change. But Congress has floated adjustments to this cap before without acting, and there's no guarantee any 2026 proposal survives committee, let alone gets signed into law with terms that actually help your specific situation. Meanwhile, McKinney's housing market, interest rates, and buyer demand are moving right now, and those factors are far more certain to affect your net proceeds than a bill still being debated in Washington. This post walks through what the exclusion actually covers today, what's realistically on the table for 2026, and how to think about the trade-off between waiting on tax policy and waiting out a market that could shift in the meantime. You'll also get a framework for running your own numbers so the decision isn't based on guesswork or headlines, but on your actual gain, your actual timeline, and what's realistic for your specific property in Collin County.

What the Capital Gains Exclusion Actually Covers Today

Under current law, if you've owned and lived in your home as a primary residence for at least two of the last five years, you can exclude up to $250,000 of gain if you file single, or $500,000 if you file married filing jointly. Those numbers have not changed since 1997, even though home values across McKinney and the rest of Collin County have climbed dramatically since then. That mismatch is exactly why this topic keeps coming up in Congress, and why sellers in appreciating neighborhoods are paying closer attention.

You can read the official rules directly from the IRS on Topic No. 701, Sale of Your Home, which is worth reviewing with your tax professional before you make any decision based on gain projections.

Is Congress Actually Going to Raise the Cap?

There have been proposals introduced to raise or index the exclusion cap to inflation, but proposals are not the same as passed legislation. Tax law changes typically move slowly, get negotiated down, or get attached to larger bills that stall entirely. Waiting on the assumption that a higher cap will apply retroactively, or apply at all in 2026, is a bet on a process that's historically unreliable.

Even if a change does pass, it could come with new conditions, phase-in periods, or income limits that reduce the benefit for higher earners. In other words, waiting isn't a guaranteed win. It's a delay with a real cost of its own.

What Waiting Actually Costs You in McKinney

While you're waiting to see what Congress does, the McKinney and Collin County market keeps moving. A few things to weigh:

• Appreciation isn't guaranteed to continue at the same pace. Rates, inventory, and local job growth all affect how much your home is worth next year compared to today.
• Carrying costs add up. Property taxes, insurance, and maintenance don't pause while you wait for legislation.
• Rental property owners face a separate deadline. If your McKinney property is a rental rather than a primary residence, the capital gains exclusion likely doesn't apply to you at all, and other timing pressures may matter more. If that's your situation, see our post on whether to sell a Craig Ranch or Stonebridge Ranch rental before the appraisal cap changes.

How to Decide: Run the Numbers That Matter Now

Instead of trying to predict what Congress will do, start with what you actually know:

• Your purchase price plus documented capital improvements (this establishes your cost basis)
• Your likely sale price based on current McKinney comps
• Whether your projected gain is close to, at, or well above the current exclusion limits

If your projected gain is comfortably under $250,000 or $500,000 depending on your filing status, the exclusion cap debate may not even affect you, and there's little reason to wait. If your gain is well above those thresholds, a higher future cap could matter, but so could a shift in McKinney home values between now and whenever Congress acts. Both directions carry risk.

Location Still Drives the Bigger Decision

Where your home sits in Collin County matters just as much as the tax math. Homes in strong demand areas of McKinney tend to hold value and sell predictably regardless of what happens in Washington, while softer pockets are more exposed to market shifts you can't control by waiting. That's worth factoring in alongside any tax consideration.

FAQ

What is the current capital gains exclusion for selling a home?

Under current law, single filers can exclude up to $250,000 of gain and married couples filing jointly can exclude up to $500,000, provided you meet the ownership and use tests. These amounts have not changed since 1997.

Will Congress definitely raise the exclusion cap in 2026?

There's no guarantee. Proposals to raise or index the cap have been introduced before without becoming law, and any future change could include new conditions or limits.

Should I wait to sell my McKinney home until the law changes?

For most sellers, no. Market conditions, carrying costs, and your actual projected gain are more certain factors than a bill that hasn't passed. It's usually better to make a decision based on your real numbers today.

Run your actual gain numbers now so you're ready to move fast whether or not the exclusion cap changes. Reach out to Jane Clark at Keller Williams McKinney for a clear-eyed look at your equity, your timeline, and what selling in McKinney and Collin County really looks like right now.