Do I Have to Pay Capital Gains Tax When Selling a House in Washington State?

Do You Pay Capital Gains Tax When Selling a Home in Washington?

One of the most common questions Tacoma homeowners ask when considering selling is:

“Will I owe taxes on the profit from my home sale?”

The answer depends on several factors, including how long you’ve owned the home and whether it was your primary residence.

What Is Capital Gains Tax?

Capital gains tax is a tax on the profit made from selling an asset, including real estate.

The gain is calculated as:

Sale Price – Purchase Price – Improvements = Profit

Primary Residence Exemption

Most homeowners qualify for a major tax break.

You may exclude:

• Up to $250,000 in profit (single)
• Up to $500,000 (married couples)

To qualify:

• You must have lived in the home for 2 of the last 5 years

Washington State Capital Gains Tax

Washington does have a capital gains tax, but it generally does NOT apply to real estate sales.

However, tax laws can change, so it’s important to verify your specific situation with a tax professional.

Ways to Reduce Capital Gains

You may reduce your taxable gain by:

• Documenting home improvements
• Accounting for selling costs
• Timing your sale strategically

Thinking About Selling Your Tacoma Home?

If you’re considering selling, I can help you estimate your net proceeds and guide you through the process.

Jaryd Ruffner
eXp Realty
253-686-6356