After purchase and selling in the US
Homestead, the $250,000 or $500,000 gain exclusion and what the seller pays.
Applies to: United States. Reviewed 2026-09-25.
Key takeaways
- Up to $250,000 of the gain is excluded, $500,000 for married filing jointly, if you owned and lived in the home for two of the last five years.
- Apply for the homestead exemption where available, often with a deadline after purchase.
- Foreign sellers are subject to FIRPTA withholding.
Selling and tax
You can exclude up to $250,000 of the gain from tax, or $500,000 for married filing jointly, if you owned the home and used it as your main home for at least two of the five years before the sale.
If the seller is a foreign person, the buyer must normally withhold part of the price under FIRPTA.
The first months
- Apply for the homestead exemption if your state has one.
- Change the locks and check smoke and carbon monoxide alarms.
- Keep closing documents, improvement receipts and warranties.
Questions to ask
- How have we taken title, and do we have wills?
Red flags
- You sell before two years without working out the tax.
Sources
- Publication 523, Selling Your Home (Internal Revenue Service)
- FIRPTA withholding (Internal Revenue Service)