[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Page E41]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           INTRODUCTION OF THE HOMEOWNERS RELIEF ACT OF 1997

                                 ______
                                 

                           HON. SUE W. KELLY

                              of new york

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mrs. KELLY. Mr. Speaker, because the American people are looking to 
us for tax relief, I rise on the first day of the 105th Congress to 
reintroduce the Homeowners Relief Act of 1997. This initiative, which 
provides homeowners with relief from capital gains taxation when they 
sell their home, is identical to legislation that I introduced during 
their 104th Congress.
  This legislation recognizes that a person's home is something more 
than a simple investment; it's a fundamental part of the American 
dream, and our Tax Code should reflect this fact. An investment in a 
home is an investment in your community and in your future. Indeed, for 
many Americans, the equity built up after many years in a home 
represents a significant part of their retirement nest egg.
  Owning a new home is the dream of young couples starting a new life 
together, of newly arrived immigrants eager to realize the American 
dream, and of all people working to build a better life for themselves 
and their children.
  Homeownership is special, Mr. Speaker, and it should occupy a special 
place in the realm of public policy. The Homeowners Relief Act does 
just that--any gains from the sale of a principle residence would be 
exempt from capital gains taxation. Specifically, the bill excludes 
from taxation the gains from the sale of a principle residence if, 
during the 7-year period prior to the sale of the residence, the 
property was owned by the taxpayer and used as the taxpayer's principle 
residence for 5 or more years.
  Current law provides some relief for homeowners, but it doesn't go 
far enough. Taxpayers may roll the gains from the sale of a home into a 
new home of equal or greater value, and older Americans can claim a 
one-time $125,000 exclusion when they sell their principle residence. 
These exemptions shield some homeowners from capital gains liability, 
but certain circumstances force many to shoulder a significant capital 
gains tax bite when they sell their home. Increased home values put 
many taxpayers, particularly older Americans looking to retire, in the 
difficult situation of having to pay substantial capital gains taxes. 
In addition, at a time when corporate downsizing is all too common, 
often the most substantial asset held by laid-off workers is their 
home.
  The problem is that current law may lock individuals into homes that 
they might wish to sell. Those individuals who can afford to purchase a 
more expensive home can postpone capital gains liability, while those 
who need to move to more modest accommodations, because their economic 
circumstances warrant doing so, must pay a tax.
  Mr. Speaker, by passing this legislation, Congress will give 
homeowners needed relief from this inequity, and will put recognition 
in the Tax Code of the special status of the home. I urge my colleagues 
to join me in supporting the Homeowners Relief Act of 1997.

                          ____________________