Sale of property · 2026 tax year
Capital Gains Tax on the Sale of Property
Selling a home or property? Estimate the tax after the $250,000 / $500,000 primary-residence exclusion, the long-term rate, the 3.8% NIIT, and state tax.
Short answer
When you sell your main home, you can exclude up to $250,000 of gain (single) or $500,000 (married filing jointly) if you lived there 2 of the last 5 years — so many sellers owe nothing. Only the gain above the exclusion is taxed at the long-term 0/15/20% rate, plus NIIT and state tax. The exclusion is applied below.
Your after-tax gain
$355,650.00
$44,350.00 total tax · 11.1% effective · long-term
- Capital gain
- $400,000
- Primary-residence exclusion
- −$250,000
- Federal capital gains tax
- −$22,500.00
- Net Investment Income Tax (3.8%)
- −$1,900.00
- State tax
- −$19,950.00
- Total tax
- −$44,350.00
- ⚠ Applied the $250,000 primary-residence exclusion. This assumes you owned and lived in the home at least 2 of the last 5 years.
Frequently asked questions
Do I pay capital gains tax when I sell my house?+
Often not, thanks to the home-sale exclusion. If the property was your main home for at least 2 of the last 5 years, you can exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). Most sellers fall entirely under that cap and owe nothing. Only the gain above the exclusion is taxed — at the long-term 0/15/20% rate, plus the 3.8% NIIT for high earners and any state tax.
How do I calculate the gain on the sale of a property?+
Gain = sale price − cost basis. Your cost basis is the original purchase price plus buying costs and any capital improvements (a new roof, addition, or renovation), and you can also subtract selling costs like the agent's commission from the sale price. The result is your gain — not the cash you receive after paying off the mortgage, which doesn't affect the tax.
What if my home-sale gain is more than the exclusion?+
Only the excess is taxed. A married couple with a $650,000 gain excludes $500,000 and pays capital gains tax on the remaining $150,000 at the long-term 0/15/20% rate (a home is virtually always long-term), plus possibly the 3.8% NIIT and state tax. Raising your basis with documented improvements is the main way to shrink the taxable portion.
Does the exclusion apply to a second home or rental?+
No. The $250k/$500k exclusion is only for a primary residence you lived in 2 of the last 5 years. A vacation home or rental is fully taxable, and rentals also owe depreciation recapture (up to 25%) on the depreciation you claimed. A 1031 exchange can defer tax on an investment property if you reinvest the proceeds.
Selling a rental or investment property? See capital gains tax on real estate, or the main capital gains tax calculator.
This is an estimate, not tax advice. It doesn't model partial exclusions, depreciation recapture, or 1031 exchanges. Confirm with a tax professional before relying on it.