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Erin
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Erin asked 5 months ago in Buying a Home

If I sell my home, how much time can I wait to reinvest in a new home before I have to pay tax on the proceeds?

This will be my first home that I'm selling, so I believe I can get the profit tax-free if I reinvest in another home within a certain timeframe. Does anyone know how long I can wait? I plan to rent while the real estate market continues to decline. Also, do I have to reinvest the full amount of the proceeds into a down payment or just a portion?

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Heather Zaczek
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Heather Zaczek responded 5 months ago

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You don't have to buy another home with your sale proceeds. When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes. This assumes that you have lived in your home for at least two of the last five years.

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Oscar Miranda
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Oscar Miranda responded 4 months ago

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There is no capital tax on the profits from primary residence, within limits. $250,000 for single, and $500,000 for married couple.
Primary residence implies owner occupied for at least 2 of the last 5 years.
Investment (or rental) property is vastly more complicated, with strict re-investment guideline to avoid or minimize taxe consequences.

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