Everything you need to know about Capital Gains Tax In Nevada
If you’re contemplating selling your home, you may be asking the question, when you sell a house, do you have to pay taxes on that? Normally, this kind of sale is taxed via what is commonly known as capital gains tax. Capital gains are profits you or your business makes on any non-inventory asset, such as stocks, bonds, real estate and property. Unfortunately, Uncle Sam wants his share of this too, in the form of capital gains tax. However, if you have lived in the house as your primary residence for at least 2 of the 5 years before the sale, the first $250,000 of your profit is tax-free. Most homeowners do not have to pay capital gains tax on the sale of a house due to the IRS allowing you this exclusion – but there are exceptions, of course. So, generally the short answer is no, at least not capital gains tax, assuming you fall into these categories and qualifications. If you’re deciding to possibly start flipping houses, however, the answer is yes. And unfortunately, capital gains taxes are some of the steepest there are, at 15-20% of your profits. You will, however, pay prorated property taxes up to the date of the sale, as well as something called a real estate transfer tax or a government transfer tax, also known (sometimes) as a title fee. In Las Vegas, the average cost for a median size house’s real estate transfer tax is around $1400, and every city is different. Even within the same state, cities can vary greatly in these amounts.
Can You Afford To Sell
So there are literally a myriad of reasons why you may need or want to sell your house, from divorce to a job offer in another state. Perhaps you’re facing an inevitable foreclosure due to unforeseen circumstances that have caused you to experience a financial hardship you didn’t expect. (See our post: Can I sell My House Before Foreclosure) Whatever the case may be, there are many things to consider, such as can you afford to sell? The fact of the matter is, although you may escape capital gains tax, there are many other costs involved with selling your house. The average major home repair costs around $5,000, and a remodeling project can easily cost $10-15,000 or more. You can count on spending a decent chunk on getting your home ready for the dreaded inspection, as well as for showing it to prospective buyers. On top of this, you’re going to need a good real estate agent. It’s just the smartest and easiest choice, especially when you’re going to be so busy with everything else that needs to be done. The average realtor’s commission is 6% of the sale price, and in Nevada the average home value is around $312,000. This makes $18,720 in commission you’ll be paying your agent. Then you have to figure in closing costs, another 1-3% which totals $3,127-$9,380 using this sale price. The average 2-3 bedroom home is going to cost you another approximately $1,500 to move. And don’t forget about the taxes we did mention above, at an average of $1,400. When you stop to add up all of these costs, the question may become, can you afford to sell?
