If you bought your DFW home before 2018 and you have been telling yourself "I don't owe capital gains because I'm under the limit," you should run the math one more time. The limit hasn't moved. Your home has.
NAR's May 18, 2026 research report, "The Growing Gap Between Home Prices and Capital Gains Limits," puts a number on something most longtime homeowners have only felt in the abstract. The capital gains exclusion on the sale of a primary residence is $250,000 for a single filer and $500,000 for a married couple filing jointly. Those thresholds were set in 1997. They have not been adjusted for inflation. They have not been adjusted for home price appreciation. They are the same numbers today that they were when Bill Clinton signed them into law.
What has changed: everything else.
The structural problem
NAR's key findings are straightforward:
- Filing status matters more than ever. A married couple gets twice the exclusion of a single homeowner. For long-tenure widowed or single filers, the threshold can be a real ceiling.
- Each additional dollar of price growth expands exposure. The thresholds are fixed. Appreciation is not.
- Capital gains exposure is no longer limited to high-cost coastal markets. It is showing up across the country, including in states most people would not associate with capital gains friction.
- *Exposure reflects when a homeowner bought, not just where they live.* A long-time owner in a modest market can have more exposure than a recent buyer in an expensive one.
- Housing supply is affected. Owners who would otherwise downsize, relocate, or move closer to family stay put because the tax bill at sale feels punitive. NAR explicitly frames this as a supply-side problem, not just an individual tax issue.
These estimates, NAR notes, are conservative. They exclude luxury homes, second homes, and investor properties, and they do not adjust the cost basis upward for capital improvements (which can legitimately reduce the gain).
Why this hits DFW specifically
Run an illustrative example with DFW-realistic numbers.
A married couple buys a Plano home in 2014 for $325,000. They put in a kitchen renovation and a roof at some point along the way. Today, a reasonable comparable sale on their street suggests a $700,000 list price. Selling costs at 6-8% take roughly $50,000 off the top. After commissions and closing costs, their realized sale proceeds are roughly $650,000.
Their gain calculation: - Net proceeds: ~$650,000 - Less original basis ($325,000) and documented improvements (let's say $40,000): basis becomes $365,000 - Realized gain: roughly $285,000
For a married couple, that fits comfortably inside the $500,000 exclusion. No federal capital gains tax owed.
Now run the same example for a single filer (widowed, divorced, or never married) with the same numbers. Same $285,000 gain. But the exclusion is $250,000. The first $250,000 of gain is excluded; the remaining $35,000 is taxable. At a long-term capital gains rate of 15% (or 20% for higher earners), that is roughly $5,250-$7,000 of federal tax on the sale. Possibly more, depending on state-level treatment and any Net Investment Income Tax that applies.
Now run an example for a married couple who bought their Plano home in 2011 for $250,000 and today are looking at an $800,000 list price.
- Net proceeds after costs: ~$745,000
- Basis with documented improvements (say $50,000): $300,000
- Realized gain: roughly $445,000
Still inside the $500,000 exclusion. Tight, but inside. For a single filer in that same scenario: $195,000 of taxable gain.
The lesson from the NAR research is not "panic." It is "the threshold is no longer obviously generous, especially for single filers and especially for owners who bought before the post-2018 DFW run-up."
The conversations I think DFW sellers should have right now
If you bought your primary residence in DFW before roughly 2019, here are the questions worth working through before you list:
1. What is your actual basis?
Original purchase price plus capital improvements (kitchen, roof, HVAC, additions, major landscaping). Cosmetic repairs do not count. Maintenance does not count. Improvements that add value, prolong useful life, or adapt the property to new uses do count. Pulling together your improvement records before the year you sell is worth doing.
2. What is your realistic net gain?
Use a recent local comparable sale, not the Zestimate. Net out a realistic 6-8% in selling costs. Subtract your basis. That is your gain.
3. What is your filing status at sale?
This is the single biggest variable for many sellers. A surviving spouse can elect to use the joint $500,000 exclusion if the home is sold within two years of the spouse's death and other conditions are met. That two-year window is consequential. Sellers should be aware of it before, not after.
4. Is the timing of the sale flexible?
If your gain is just above the threshold, sometimes a small adjustment (one more year of basis-adding improvements, a slight delay to align with a marriage or a filing-status change, a 1031-like structure if part of the property was rented) can change the tax outcome materially. A CPA should make that call, not me.
What I would tell any longtime DFW seller
Get the basis math done before you set the list price. Get your CPA on the phone before, not after. The capital gains exclusion is not new, and the rule is not changing tomorrow, but NAR's data makes the point that the rule no longer behaves like an obvious "I'm fine" guardrail for many longtime owners. It behaves like a cliff some sellers do not see coming.
This is not financial or tax advice. Every situation is different, and the math depends on facts I do not have about your specific basis, filing status, and improvements. Talk to a CPA. But before you talk to the CPA, get a real number on your home's likely sale price. That is the conversation I am happy to have.
Source: The Growing Gap Between Home Prices and Capital Gains Limits — NAR Research, May 2026
“The capital gains exclusion is not a generous guardrail anymore. For longtime DFW owners it is starting to behave like a cliff.”
