Realtor Joyce Bremer explains new benefits for homeowners and homebuyers.
Imagine buying something — say, a house — and later selling it for more than it was bought for. Normally, the state would take a slice of the sale. That slice is called a capital gains tax. But, Missouri just passed a law that says homeowners no longer owe that tax to the state on such profits — including from homes, stocks, or other assets.
On July 10, 2025, Gov. Mike Kehoe signed House Bill 594, which eliminates Missouri’s capital gains tax for individuals, retroactive to January 1, 2025. Missouri is now the first state with an income tax to do this. What does this mean for Missourians? Missourians now keep full control of their state-level proceeds. This new law puts more money in pockets and creates exciting opportunities in Missouri’s housing market.
More Profit When Selling
For sellers, this change is simple but powerful. When selling a home or investment property at a profit, sellers no longer owe Missouri state tax on those gains. Previously, if one sold their home for a gain, Missouri would have taxed that gain, up to around 4.7%. Now, that state portion is gone. Sellers get to keep more of their money. For everyday homeowners, that could mean saving thousands that can go toward moving, reinvestments, or even a dream vacation.
Beyond that, investors (especially those with rental properties) may feel more comfortable selling, seeing the full return on their investment without worrying about state tax deductions.
“The tax cut sends a message that Missouri is open for business, fueling demand, development, and local economic vitality — which are all good for real estate health.”
Joyce Bremer
Confidence for Buyers
For anyone buying their first home, the long-term benefit is clear. When it’s time to sell, Missouri won’t take a cut of the profit. That makes homeownership both a smart lifestyle choice and a smart financial investment.
Those who may be moving up to a bigger home also benefit. Sellers who walk away with a profit can bring larger down payments to the table, helping deals come together faster and making it easier overall for both sides of the transaction.
A Healthier Housing Market
Sellers keeping more profit can lead to more homes listed for sale, helping ease recent years of tight inventory. More homes on the market means more choices for buyers, healthier competition, and a better balance in Missouri’s housing market overall. It means more listings to browse, more opportunities to find the perfect home, and less pressure in a competitive market.
A Boost for Neighborhoods and Communities
This change also has the potential to revitalize neighborhoods. Real estate investors now have more reason to buy, renovate, and improve homes here, since state taxes won’t reduce their profits. That means more updated rentals, stronger property values, and renewed life in communities that benefit from fresh investments. As investors reinvest in homes and neighborhoods, local property values and community pride can rise together.
The Bottom Line
In short, Missouri’s decision to eliminate the state capital gains tax is a game-changer for the housing market — allowing sellers to keep more of their profits, giving buyers greater confidence in their long-term investment, and encouraging new energy and investment in local communities. This reform strengthens the future of homeownership across the state.
The tax cut sends a message that Missouri is open for business, fueling demand, development, and local economic vitality — which are all good for real estate health.