Why experts say proposed capital gains tax changes could reshape real estate market

August 25, 2026 - 10:41

Financial analyst Paul Hood appeared on News on 6 at 4 p.m. to break down how proposed changes to capital gains taxes might push more homeowners to list their properties and get the real estate sector moving again. Hood pointed out that the current tax structure often locks people into their homes because selling triggers a hefty tax bill on the profit they have built up over years. If the government lowers the rate or raises the exemption threshold, that lock-in effect weakens.

According to Hood, the shift could be significant. Older homeowners who have been sitting on properties for decades might finally decide to downsize or relocate, freeing up family-sized homes that are in short supply. That extra inventory could cool off bidding wars in hot neighborhoods and give first-time buyers a real chance. On the flip side, investors who hold rental properties may hold off on selling if the new rules favor long-term ownership, which could keep rental supply tight.

Hood also warned that the change is not a cure-all. Local market conditions, interest rates, and buyer demand still play a huge role. But he said the tax proposal, if passed, would remove one of the biggest barriers to turnover. He encouraged homeowners to run the numbers with a tax professional before making any moves, since the final details of the legislation are still being negotiated. For now, the market is watching closely, and some sellers may already be holding off on listing until they know what the tax landscape will look like next year.