What Taxes Do I Pay When Selling a Home in Port Washington?

What taxes will you pay when selling your Port Washington home?
The taxes you owe depend on your profit, how long you’ve owned the home, and whether it was your primary residence. Most sellers pay capital gains tax, while others may also owe New York State transfer tax and other local fees.

1. Capital Gains Tax

What It Is

Capital gains tax applies when you sell your home for more than you paid for it. The taxable gain is your sale price minus your adjusted cost basis (purchase price plus improvements and selling costs).

The Exclusion Rule

If the property was your primary residence for at least two of the last five years, you may qualify for:

• Up to $250,000 in tax-free profit (single filers)

• Up to $500,000 in tax-free profit (married filing jointly)

Example

If you bought your Port Washington home for $600,000 and sell it for $1,000,000, your profit is $400,000. If you’re married, that gain is fully excluded from federal tax under the $500,000 rule.

When You’ll Owe

You’ll owe capital gains tax if:

• You owned the home for less than two years.

• The property wasn’t your primary residence (e.g., a rental or second home).

• Your profit exceeds the $250K/$500K exclusion.

2. New York State Transfer Tax

New York State imposes a transfer tax of $4 per $1,000 of the sale price (0.4%).

Example

If you sell your home for $1,000,000, your transfer tax is $4,000.

This tax is typically paid by the seller at closing, though the responsibility can sometimes be negotiated in the contract.

3. Mansion Tax (for Higher-Value Sales)

If your Port Washington home sells for $1 million or more, you’ll owe a 1% Mansion Tax on the sale price.

Example

• $1,000,000 sale → $10,000 tax.

This tax applies to residential properties and is usually paid by the buyer, but it’s helpful for sellers to understand how it may impact negotiations.

4. Property Taxes and Prorations

At closing, you’ll pay any outstanding property taxes up to the date of sale. Taxes are prorated between buyer and seller based on the closing date.

5. Possible Deductions and Adjustments

You can reduce your taxable gain by factoring in:

• Home improvements (new roof, kitchen remodel, etc.)

• Selling expenses (commissions, staging, attorney fees, marketing)

• Closing costs you originally paid when buying

Keep documentation for all improvements and major repairs — they can significantly reduce your tax liability.

How Eric Berman Helps Port Washington Sellers

Eric Berman, REALTOR, works closely with Port Washington homeowners and their financial advisors to:

• Estimate potential net proceeds after taxes.

• Identify deductible improvements and selling costs.

• Connect sellers with experienced CPAs or tax professionals for personalized advice.

Bottom Line

When selling your Port Washington home, taxes depend on your profit, ownership history, and sale price. Planning ahead with your real estate agent and tax advisor ensures there are no surprises at closing.

Thinking about selling your Port Washington home? Contact Eric Berman for a personalized estimate of your proceeds and guidance through the process.

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What taxes do you pay when selling a home in Port Washington? Learn about capital gains, transfer tax, and deductions with insights from REALTOR Eric Berman.