If government wants to know why some Florida homeowners are staying in homes they no longer need, it should look in the mirror.
For nearly 30 years, Washington has left a key federal tax threshold frozen in time while Florida’s housing market has transformed around it.
That isn’t good policy. It is government failing to keep up with reality.
I’ve spent decades involved in Republican politics, public policy, business, consulting and entrepreneurship. One lesson has remained consistent: when government gets the incentives wrong, people respond to those incentives—even when the government never intended the outcome.
That is precisely what is happening with the federal capital-gains exclusion for the sale of a primary residence.
Since 1997, an individual homeowner has generally been able to exclude up to $250,000 in capital gains on the sale of a qualifying primary residence, while married couples filing jointly can generally exclude $500,000.
Those numbers might have made sense nearly three decades ago.
But Florida in 2026 is not Florida in 1997.
Home values have changed dramatically. Insurance costs have changed. Construction costs have changed. The cost of buying the next home has changed. Yet the federal government continues to apply the same exclusion thresholds established when the housing market looked very different.
That creates a problem that is easy to overlook.
Imagine a Floridian who bought a home decades ago. They paid the mortgage. They maintained the property. They paid property taxes and insurance. They took the risk of homeownership and, over time, built substantial equity.
That appreciation is not a government handout. It is the result of ownership.
Now suppose that homeowner is ready to downsize. Perhaps the children are grown. Perhaps the house has become more than they need. Perhaps they want to move closer to their children or grandchildren. Perhaps they simply want a home that better fits the next stage of their life.
Then they do the math.
They calculate the price of the next home. They calculate insurance. They calculate closing costs and moving expenses. And then they calculate the potential federal tax bill on the appreciation they accumulated over decades.
Suddenly, staying put may look like the financially responsible choice.
That should concern anyone who believes housing markets work best when people are free to make voluntary decisions based on their own circumstances.
When government makes it more expensive to sell, some people will sell less.
And when homeowners who would otherwise move stay where they are, those homes don’t enter the market for someone else.
That matters in Florida.
A young family trying to purchase its first home doesn’t care why a property isn’t available. A retiree looking to downsize doesn’t care which federal tax provision is responsible. A family trying to move closer to parents or grandparents doesn’t care that Congress hasn’t updated a number since the 1990s.
They simply experience the consequences: fewer choices and higher costs.
This is why I’m skeptical whenever the answer to a housing problem is another government program, subsidy or complicated incentive.
Sometimes the better answer is to stop creating unnecessary obstacles in the first place.
The federal government doesn’t need to build a single house to help improve housing mobility. It doesn’t need another bureaucracy. It doesn’t need to pick winners and losers.
Congress can simply update an outdated tax provision.
The bipartisan More Homes on the Market Act would increase the current capital-gains exclusion for qualifying primary residences. That is a sensible step toward bringing federal tax policy closer to the economic realities homeowners face today.
And it is consistent with a principle I have believed in throughout my career: government should not punish people for making responsible decisions with their own property.
Homeownership is supposed to be one of the foundations of financial independence. Building equity should be celebrated. Families should be able to use that equity to make decisions about their future without an arbitrary federal threshold standing in their way.
Of course, updating the capital-gains exclusion will not solve Florida’s housing challenges by itself.
Florida still has to deal with insurance costs, regulatory barriers, construction costs, property taxes, interest rates and the basic problem of supply not keeping pace with demand.
But we shouldn’t let the perfect become the enemy of the practical.
If an outdated federal rule is discouraging homeowners from putting properties on the market, Congress should fix it.
There is also a larger lesson here.
Government policies have consequences far beyond the language written into the statute. A number that seemed reasonable in 1997 can become a barrier in 2026. A policy intended to protect homeowners can eventually discourage them from moving. And a tax rule written in Washington can influence whether a family in Manatee County decides it can afford to move closer to the people they love.
That’s why policy should be judged by its real-world results—not simply by the intentions behind it.
Florida doesn’t need Washington to tell its residents where they should live.
It doesn’t need another federal housing scheme.
It needs fewer barriers that interfere with people making their own decisions.
A homeowner who has spent decades building equity should have the freedom to decide when it’s time to sell, downsize, relocate or move closer to family.
The federal government shouldn’t be the reason they decide they can’t.
Congress should update the capital-gains exclusion, remove this outdated barrier and let the housing market work a little more like a free market—and a little less like Washington.
STACY SNOW FEILER — Business Broker and Realtor
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