House Sale Tax Calculator
When selling your home, it’s essential to understand how taxes may impact the profits you make from the sale. The primary tax that may apply is capital gains tax (CGT), which is based on the difference between the selling price and the purchase price of the property. This article will guide you through the basics of house sale taxes and show you how to use a house sale tax calculator to estimate your tax liabilities.
Calculate Your House Sale Tax
Use the calculator below to estimate the tax you'll need to pay after selling your home. Simply input the required values such as the purchase price, sale price, and your tax rate, and the calculator will provide you with an estimate of your capital gains tax.
Note: The calculator provides an estimate, and tax rates may vary depending on your local laws and exemptions.
What Is Capital Gains Tax on Home Sales?
Capital gains tax applies to the profit you make from selling a home that isn’t your primary residence or that doesn’t qualify for certain exemptions. For example, if you sell an investment property, you will likely owe capital gains tax. On the other hand, if the home is your primary residence and you've lived in it for at least two out of the past five years, you may be eligible for an exclusion of up to $250,000 ($500,000 for married couples filing jointly).
How to Calculate Your Capital Gains Tax
To calculate the capital gains tax on the sale of your home, you need to know the following:
- Purchase Price: The price at which you bought the home.
- Sale Price: The price at which you sold the home.
- Adjustments to the Property's Basis: This includes costs like home improvements or selling expenses.
Once you have these numbers, the capital gain is the difference between the sale price and the purchase price (adjusted for any allowable improvements or deductions). Afterward, you can apply your applicable tax rate to calculate your tax liability.