Taxes on Selling a House in New York
When selling a house in New York, many people focus on sale price and agent commissions—but taxes can significantly affect your final profit. Understanding the different types of taxes that apply when selling a home in New York is essential for making informed financial decisions. This guide explains the key taxes, exemptions, and how CashBuyersNY can help homeowners navigate the complex process with ease. Capital Gains Taxes in New York The most significant tax consideration when selling your home is the capital gains tax. This tax is based on the profit made from selling your property, calculated as the difference between the selling price and the original purchase price. Key Points: Long-term capital gains apply if you’ve owned the home for more than one year. Short-term capital gains are taxed at your ordinary income rate if the home was held for less than one year. Federal capital gains tax is typically around 15% for most individuals. New York State tax adds another 6.85%. New York City residents may pay an additional tax of up to 3.876%. Capital Gains Exemptions If the home was your primary residence for at least 2 out of the last 5 years, you may qualify for: $250,000 exclusion for individuals $500,000 exclusion for married couples filing jointly These exemptions can significantly reduce or eliminate your capital gains tax liability. Tax Considerations for Non-Residents If you’re a non-resident or a foreign investor selling property in New York, you face different rules under the Foreign Investment in Real Property Tax Act (FIRPTA). Tax Withholding Rates: Federal Withholding: 10% of the gross sales price New York State Withholding: 6.85% Buyers are required to withhold and remit these amounts to the IRS and New York State. You’ll also need to file Form 8288 with the IRS to report the sale. Common Tax Exemptions for Sellers There are certain situations where you may qualify for a partial or full tax exemption, even if the standard primary residence rule doesn’t apply. Qualifying Situations: Job relocation Health issues (with documentation from a licensed physician) Divorce Military deployment (special IRS rules apply) Natural disasters or unforeseen events (refer to IRS Publication 523) 1031 Exchange: Like-Kind Property Exemption A 1031 exchange allows you to defer capital gains taxes by reinvesting the proceeds into a similar or more valuable property. Conditions: Must identify new property within 45 days Must close on new property within 180 days Both properties must be in the U.S. This strategy is most commonly used by real estate investors looking to preserve capital and build wealth. Mortgage Tax Advantages If you still have a mortgage on your home, you may be able to claim deductions: Mortgage interest payments Property tax payments These deductions can help reduce your overall taxable income. However, be sure to consult a licensed tax advisor, as laws change frequently. How CashBuyersNY Can Help For over a decade, CashBuyersNY has helped homeowners sell their properties fast and without stress. Whether you’re concerned about tax liabilities or simply want a cash offer with no fees, we provide: Cash offers within 24 hours No commissions or closing costs Purchase of homes as-is—including tax or tenant complications Fast closings in as little as 7 days We make it easy to sell your home in New York City and beyond, regardless of your tax situation. Final Thoughts Selling a house in New York comes with several tax responsibilities that can affect your bottom line. By understanding your obligations and exemptions, you can avoid surprises and make smarter financial choices. Whether you’re a New York resident or a foreign investor, working with experts like CashBuyersNY ensures a smooth and tax-efficient sale. Disclaimer The information provided in this article is for general informational purposes only and does not constitute legal or tax advice. Always consult with a licensed tax professional or financial advisor to assess your specific situation.
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