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How Much Are Capital Gains Taxes And How To Avoid Paying Them

How much can you expect to pay in capital gains tax when it comes to selling your home? If you’re anything like me, you want to avoid or minimize your tax burden when it comes to doing just about anything.

A large tax that’s out there when it comes to selling your home is a capital gains tax. When you sell a home, the government wants a piece of your profit or your gain.

An example is, if you bought your home for $200,000 and you sell it for $1 million, they’re going to take a percentage of that $800,000 profit one time, and you’re going to owe it on the next tax bill. How much is that? And are there ways to avoid it? I’m going to tell you that in today’s video.

First and foremost, understand this. When it comes to your primary residence, the home you live in, there is currently an exemption. I’m shooting the video in 2021. That means for a single person, you get a $250,000 exemption against capital gains tax. So if you bought it for $200,000 and sold it for $450,000, that $250,000 profit you would not be taxed, zero tax. Chances are that the exemption won’t last forever and taxes will go up, and they will most likely be getting rid of incentives like that soon. So right now in 2021, the exemption is $250,000 for a single person and $500,000 for a married couple

Now, here’s the catch. You need to live there for two years. If you’ve lived in your primary residence for two years out of the last five, you’re exempt.

If you’re wondering how much you’re going to pay in capital gains tax, if you sell your home, get a hold of us. We’ll let you know how much it could sell for in today’s marketplace.

So just be warned this exemption won’t last forever and we don’t know what’s going to happen in the future. My bet is taxes are going to be put into place, and it’s going to be on the capital gains side of real estate. So if you want to act now, it is not a bad idea.

Nick McLean
Nick McLean Real Estate Group
Text us your real estate questions 509.670.5532

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