Home & property · 2026 tax year
Capital Gains Tax on Real Estate
Estimate the tax on selling a house or property — with the $250,000 / $500,000 primary-residence exclusion applied before the long-term rate, NIIT, and state tax.
Short answer
On a primary residence 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. Only the gain above that is taxed, at the long-term 0/15/20% rate plus the 3.8% NIIT and state tax. The exclusion is toggled on below.
Your after-tax gain
$423,550.00
$76,450.00 total tax · 15.3% effective · long-term
- Capital gain
- $500,000
- Primary-residence exclusion
- −$250,000
- Federal capital gains tax
- −$37,500.00
- Net Investment Income Tax (3.8%)
- −$5,700.00
- State tax
- −$33,250.00
- Total tax
- −$76,450.00
- ⚠ Applied the $250,000 primary-residence exclusion. This assumes you owned and lived in the home at least 2 of the last 5 years.
The primary-residence exclusion
The home-sale exclusion (IRC Section 121) is the biggest break in real-estate capital gains. Own and live in the home as your main residence for at least 2 of the last 5 years and you can exclude up to $250,000 of gain, or $500,000as a married couple filing jointly. A second home or rental doesn't qualify, and rentals also face depreciation recapture — taxed at up to 25% — on top of the regular rate.
Frequently asked questions
How much is capital gains tax on the sale of a house?+
Start with your gain: the sale price minus your cost basis (purchase price + buying/selling costs + capital improvements). If the home was your main residence for at least 2 of the last 5 years, you can exclude up to $250,000 of gain if single or $500,000 if married filing jointly. Only the gain above the exclusion is taxed — at the long-term 0/15/20% rate (a home held over a year is long-term), plus the 3.8% NIIT for high earners and any state tax.
How does the $250,000 / $500,000 home-sale exclusion work?+
Under IRC Section 121, if you owned the home and used it as your primary residence for at least 2 of the 5 years before the sale, you can exclude up to $250,000 of gain ($500,000 for a married couple filing jointly). It's a gain exclusion, not a price cap — a couple with a $450,000 gain owes nothing, while a $700,000 gain leaves $200,000 taxable. You generally can't use it more than once every two years.
Do I owe capital gains tax on a rental or investment property?+
Yes. The primary-residence exclusion doesn't apply to a rental or second home, so the full long-term gain is taxable. Rentals also face depreciation recapture — the depreciation you claimed is taxed at up to 25% — on top of the 0/15/20% rate. A 1031 like-kind exchange can defer the tax if you reinvest in another investment property. This calculator estimates the base gains tax; confirm recapture and 1031 details with a tax pro.
What counts toward my cost basis on a home?+
Your basis is more than the purchase price. Add closing costs you paid, and the cost of capital improvements — a new roof, addition, renovated kitchen, or HVAC system — but not routine repairs or maintenance. A higher basis means a smaller gain and less tax, so keep receipts for improvements over the years you own the home.
Is the home-sale gain the same as my profit after paying off the mortgage?+
No — the mortgage is irrelevant to the gain. Capital gain is sale price minus cost basis, regardless of how much you still owe the bank. You can have a large taxable gain even if most of the sale proceeds go to pay off your loan. This calculator works on the gain, not the cash you walk away with.
Selling shares instead? See the capital gains tax on stocks page, or the main capital gains tax calculator.
This is an estimate, not tax advice. It doesn't model depreciation recapture, 1031 exchanges, or partial-exclusion rules. Confirm your situation with a tax professional before relying on it.