Do you have to own a home for 5 years to avoid capital gains?

No. Under federal law, you can typically avoid capital gains tax when selling your home if you owned and lived in the house for at least two of the past five years. However, if your profit exceeds $250,000 (if you're single) or $500,000 (if you're married and file a joint tax return), you may have to pay capital gains tax on a portion of your proceeds.

How much is capital gains tax on the sale of a home?

If you owe capital gains tax on the sale of your home, your tax rate will depend on your household income and length of ownership. Selling a house after less than a year could make you liable for short-term capital gains, which are taxed at your ordinary income rate. After a year of ownership, your home selling profits qualify for long-term capital gains , which are taxed at lower rates — 20% or less, depending on your income.

Jamie Ayers

Content PM

Jamie Ayers is a Content Product Manager at Clever Real Estate, the nation's leading real estate education platform for home buyers, sellers, and investors.

At Clever, Jamie’s research focuses on the process of finding a real estate agent or broker — in particular, evaluating agent matching services and discount brokerages to help people make more informed choices (and save) when buying or selling a home.

Prior to Clever, Jamie managed digital publications for leading businesses in a range of industries, including real estate technology, commercial development, insurance, financial services, building and construction, and more.

Jamie’s writing, research, and expert advice have been featured across a wide range of publications, including Forbes, Inc., Entrepreneur, and BiggerPockets.

When he isn’t doing research and writing about real estate services, Jamie can be found training for his next marathon, hanging with his dog Gracie, or recording “music” in his home studio.

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