- April 11, 2022
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Did you know that Texas is a good place to sell your property because there are no state income taxes payable? However, depending on your individual circumstances, you may still have to pay federal taxes on selling a house. In this article, we share more with you about the taxes you are liable for when selling a house in Haslet, TX.
Understanding Capital Gains
The kind of tax you are liable for when selling a house is capital gain tax. This doesn’t just apply to a residential property, but any other type of property. You have to pay capital gain tax as you are making a commercial transaction and gaining a profit from it.
If you have owned your property for less than a year when you sell, you will need to pay a tax for short-term capital gains, which is based on your income. However, if you have owned the property for more than a year, there are exemptions you may be eligible for that can mean you end up paying no taxes on the sale at all.
Exemptions on Capital Gains Tax
In Texas, you can be exempted from paying capital gains tax if your annual capital gains add up to less than $250,000 if filing as an individual, or $500,000 if filing as a couple or head of household. However, there are certain conditions that must be met:
- The house must be your primary residence
- You must have owned the house for at least 2 years
- You must have lived in the house for at least 2 years in the past 5 years
- You must not have claimed exemption on another property within the last 2 years
If you meet all the above conditions, it’s likely you will be exempted from paying taxes on selling a house in Texas. Keep in mind that you will still have to pay the applicable tax for any amount over the above mentioned thresholds.
Who Needs to Pay Capital Gains Tax?
In addition, even if you don’t meet any of the above criteria but have an annual income below $39,375 if filing as an individual or $78,750 as a couple or head of household, you may be exempted as well. If you are earning more than that, you will be subject to a capital gains tax between 15% to 20%.
Come to Modern Feather Properties for Selling Your Home
If you are looking to sell your property quickly and without hassle, come to Modern Feather Properties. After a thorough inspection of your property, we will make you a cash offer, which is up to you to accept. You retain the flexibility to schedule your own closing once you have accepted our offer. Regardless of whether your property is in need of extensive repairs or you simply need it off your hands quickly, we can step in to help. Our financial team can also advise you on your capital gains liabilities if you have any questions at all.