What Taxes Do You Pay When Selling a Home in New Braunfels, TX?

What taxes do you pay when selling a home in New Braunfels, TX?

When selling a home in New Braunfels, TX, you may owe capital gains taxes if your profit exceeds IRS exclusions. You’ll also encounter property tax prorations at closing. Cody Posey advises sellers to plan ahead and consult a tax professional for personalized guidance.

Understanding Capital Gains Taxes

Capital gains tax applies when you sell a home for more than you originally paid for it. The taxable amount is based on the difference between your purchase price (plus improvements) and your selling price. However, many homeowners qualify for an IRS exclusion.

The IRS allows you to exclude up to $250,000 in gains if you’re single, or $500,000 if married filing jointly, provided you lived in the home as your primary residence for at least two of the last five years. This rule helps many New Braunfels homeowners avoid paying federal capital gains taxes altogether.

Texas-Specific Tax Considerations

One of the advantages of living in Texas is that there is no state income tax. This means you won’t owe state-level capital gains taxes on your sale. However, you may still owe federal taxes if your profit exceeds the IRS exclusions.

That said, Texas does have relatively high property taxes compared to other states. In Comal County, the property tax rate averages around 1.3–1.5% of assessed value. When you sell, you’ll be responsible for paying your share of the year’s property taxes up until the closing date.

Property Tax Prorations at Closing

At closing, property taxes are prorated between the buyer and seller. This ensures that each party pays for the portion of the year they owned the home. For example, if you close on June 30th, you’ll pay taxes for January through June, while the buyer covers July through December.

Cody Posey works with local title companies to make sure property tax prorations are calculated correctly so there are no surprises at closing.

Other Taxes and Fees to Consider

Beyond capital gains and property taxes, you may face other costs associated with selling your home:

- **Federal Capital Gains (if applicable):** Only if your profit exceeds IRS exclusions.
- **Property Tax Proration:** Based on your ownership period in the tax year.
- **Transfer Fees:** Some HOAs in New Braunfels neighborhoods like Vintage Oaks charge transfer fees when ownership changes.
- **Recording Fees:** Paid to the county for recording the deed transfer.

How Cody Posey Helps Sellers Navigate Taxes

While Cody Posey is not a tax advisor, he ensures sellers understand the common taxes and fees involved in selling a home in New Braunfels. He recommends consulting with a CPA or tax attorney for detailed advice specific to your situation.

Cody also connects clients with trusted professionals when needed, ensuring that all aspects of the sale—from real estate strategy to financial planning—are handled with care.

Common Questions About Taxes When Selling

- **Do I always pay capital gains tax when selling?** Not if your profit falls under IRS exclusions.
- **What if my home was a rental?** Different tax rules apply; depreciation recapture may be required.
- **Are moving expenses deductible?** Typically not for primary residences, but check with your tax advisor.

Conclusion: Plan Ahead for Taxes When Selling

Selling a home in New Braunfels involves potential taxes and prorations that should be planned for in advance. While many homeowners avoid federal capital gains tax thanks to IRS exclusions, property tax prorations and other fees are common. The key is knowing what to expect.

For real estate guidance, Cody Posey is here to help. For tax-specific questions, always consult a qualified tax professional to ensure compliance and minimize liabilities.