Before selling a home in San Antonio, you need to understand the tax implications. As you might know, Texas is a tax-free state with no state-level income taxes. But that doesn’t mean you’re free from all tax obligations. There’s the federal capital gains tax to pay when you sell your home.
Continue reading as we explore the taxation rules when selling a home in San Antonio. We promise to keep it jargon-free so that you can easily understand all the vital elements of taxes for selling a home.
Should I Pay Taxes When Selling My Home in San Antonio, TX?
You must pay the capital gains tax if you make a profit while selling your home. The capital gains tax is levied on the difference between the lower purchase price and the higher selling price. Capital gains tax is levied on properties you’ve held for over a year. The reason behind the capital gains tax is that when you sell something for a profit, it’s treated as a commercial transaction, and you’re taxed accordingly.
Can I Be Exempted from Capital Gains Tax in Texas?
Specific provisions in the tax code make it possible to be exempted from the capital gains tax. Here are the eligibility criteria to qualify for capital gains tax exemptions:
· You make up to $250,000 as profit when filing individually or $500,000 as profit when filing jointly with your spouse.
· The house is your primary residence.
· You have been the property owner for at least two years, and you have resided for more than two years in the last five years.
· You haven’t claimed this exemption on another property in the last two years.
If you meet all these criteria, you will be exempted from paying the capital gains taxes.
How Much Capital Gains Tax Do I Have To Pay in Texas?
It all depends on the profits you make and your finances. Generally, you are obligated to pay 15% of the selling price as capital gains tax. For example, if you sell your home for $200,000, the capital gains tax amounts to $30,000. Remember, you may be charged up to 20% of the sale price as capital gains tax depending on your finances.
Does Texas Have Property Taxes?
You have to continue paying property taxes on your home till the time of sale. Texas has one of the highest property taxes in the country and is 1.69%, well above the national average of 1.07%. If you own a property worth $300,000, the annual property tax would cost you $3,210 per year.
Is There Any Way to Avoid Taxes Altogether When Selling a San Antonio Home?
If you’re looking to avoid paying the capital gains tax, the better alternative is to sell your home directly to trusted cash home buyers in San Antonio . The advantage of selling to cash buyers is that they purchase your home as-is in any condition or situation, helping you sell a house fast in San Antonio . Cash buyers do a quick assessment of your property and provide you with a cash offer based on the current market value of your home. The best part is that you don’t have to pay any taxes or fees to accept a cash offer, and you don’t have to pay the closing costs.
Once you accept the cash offer and set the closing date, you can sign the contract, receive the cash, and pocket your profit. You don’t have to deal with any taxes. Connect with trusted cash buyers to simplify the process of selling your home anywhere in Texas.
The author is a popular cash home buyer in San Antonio who helps distressed homeowners with quick home sales. Visit https://www.bigbuckhomebuyers.com/ for more information.