What Are the Tax Implications of Selling Your Port Washington Home?

What taxes should you expect when selling your Port Washington home?
The answer depends on your profit, how long you’ve owned the property, and whether it’s your primary residence. Sellers in New York should be aware of both federal and state-level taxes that may apply.

Federal Capital Gains Tax

The IRS may tax the profit (capital gain) you make when selling your home.

  • Exclusions: If the home has been your primary residence for at least 2 of the last 5 years, you may exclude up to $250,000 in profit ($500,000 for married couples filing jointly).

  • Example: If you bought your Port Washington home for $600,000 and sell it for $1,000,000, your gain is $400,000. If you qualify for the full $500,000 exclusion, you pay no federal capital gains tax.

  • Tax Rate: If you owe tax, the rate is usually 0%, 15%, or 20% depending on your income and how long you owned the home.

New York State Taxes

In addition to federal taxes, New York imposes its own taxes at closing:

  • Transfer Tax: Sellers pay 0.4% of the sale price. On a $1,000,000 home, that’s $4,000.

  • Mansion Tax: While usually paid by buyers, some negotiations may shift part of this cost back to the seller for homes over $1 million.

Property Taxes and Adjustments

At closing, sellers must pay any outstanding property taxes. If you’ve prepaid taxes, you may receive a credit back from the buyer for the portion covering after the closing date.

Potential Additional Costs

  • Depreciation Recapture: If the home was ever rented out, prior tax benefits claimed could be “recaptured” and taxed.

  • Investment Properties: Homes that weren’t your primary residence don’t qualify for the exclusion and are fully subject to capital gains tax. A 1031 exchange may help defer taxes if you reinvest in another property.

Why Planning Ahead Matters

Tax implications vary widely based on your circumstances. Planning early with your real estate agent, attorney, and tax advisor helps you avoid surprises and maximize your net proceeds.

Eric Berman, REALTOR, provides local expertise and connects Port Washington sellers with trusted tax professionals who can explain exactly what you’ll owe — and how to minimize it.

Bottom Line: Selling your Port Washington home may trigger federal capital gains tax, New York transfer taxes, and property tax adjustments. With careful planning, many sellers can reduce or even eliminate their tax liability.

Thinking of selling? Contact Eric Berman today for a personalized strategy and referral to experienced local tax advisors.

Meta Description:
Learn the tax implications of selling a home in Port Washington, including capital gains, transfer tax, and NY closing costs. Eric Berman REALTOR explains what to expect.