What taxes will I pay when I sell my Massachusetts home?

Question 1

Kathleen Militello · Accepted Answer

The main state tax on a Massachusetts home sale is the deed excise tax, about $4.56 per $1,000 of sale price, typically paid by the seller at closing. Federal capital gains tax only applies to the profit above the primary-residence exclusion, and most sellers do not owe it. The deed excise, sometimes called deed stamps, is paid when the deed is recorded and is a predictable line on your net sheet. On a $600,000 sale it comes to roughly $2,736. For capital gains, the federal law gives most homeowners a big exclusion: up to $250,000 of profit is tax-free for a single owner, and up to $500,000 for a married couple filing jointly, if you owned and lived in the home as your primary residence for two of the past five years. Above that, or if the home was not your primary residence, taxable gain is possible. Because every tax situation is different, I include the numbers on your net sheet and point you to your accountant for the final word. What I will never do is guess your taxes. Massachusetts also considers the length of ownership and primary residence status in its own tax picture, and coastal homes that appreciated sharply can have meaningful gains. An accountant or tax professional familiar with Massachusetts is worth the conversation before you close.

Question 2

What is the Massachusetts deed excise tax?

Kathleen Militello · Accepted Answer

The main state tax on a Massachusetts home sale is the deed excise tax, about $4.56 per $1,000 of sale price, typically paid by the seller at closing. Federal capital gains tax only applies to the profit above the primary-residence exclusion, and most sellers do not owe it. The deed excise, sometimes called deed stamps, is paid when the deed is recorded and is a predictable line on your net sheet. On a $600,000 sale it comes to roughly $2,736. For capital gains, the federal law gives most homeowners a big exclusion: up to $250,000 of profit is tax-free for a single owner, and up to $500,000 for a married couple filing jointly, if you owned and lived in the home as your primary residence for two of the past five years. Above that, or if the home was not your primary residence, taxable gain is possible. Because every tax situation is different, I include the numbers on your net sheet and point you to your accountant for the final word. What I will never do is guess your taxes. Massachusetts also considers the length of ownership and primary residence status in its own tax picture, and coastal homes that appreciated sharply can have meaningful gains. An accountant or tax professional familiar with Massachusetts is worth the conversation before you close.

Question 3

Do I have to pay capital gains tax when I sell my home?

Kathleen Militello · Accepted Answer

The main state tax on a Massachusetts home sale is the deed excise tax, about $4.56 per $1,000 of sale price, typically paid by the seller at closing. Federal capital gains tax only applies to the profit above the primary-residence exclusion, and most sellers do not owe it. The deed excise, sometimes called deed stamps, is paid when the deed is recorded and is a predictable line on your net sheet. On a $600,000 sale it comes to roughly $2,736. For capital gains, the federal law gives most homeowners a big exclusion: up to $250,000 of profit is tax-free for a single owner, and up to $500,000 for a married couple filing jointly, if you owned and lived in the home as your primary residence for two of the past five years. Above that, or if the home was not your primary residence, taxable gain is possible. Because every tax situation is different, I include the numbers on your net sheet and point you to your accountant for the final word. What I will never do is guess your taxes. Massachusetts also considers the length of ownership and primary residence status in its own tax picture, and coastal homes that appreciated sharply can have meaningful gains. An accountant or tax professional familiar with Massachusetts is worth the conversation before you close.

What taxes will I pay when I sell my Massachusetts home?

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