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Selling Your Home – Taxes and Thoughts to Consider

With the recent strong real estate market, you may wonder if selling your home and capitalizing on the appreciation makes sense for you. This has been a popular topic in 2021/2022 so here are my thoughts and some details to consider:

First off, I get this question a lot – “What taxes will I pay if I sell my home?”

If you sell your primary residence (where you live most of the year), you may qualify to exclude the first $250,000 of gain if you’re single, or $500,000 of gain if you’re a married couple filing jointly.

    • For example, if you’re married filing jointly and bought your house for $300,000, you may qualify to pay $0 in taxes if you sell that house for any amount under $800,000. But you have to qualify for this exclusion. irs.gov/publications

There is no 1031 exchange on a primary residence. There is no time table where you have to buy your next home in a certain time period to avoid capital gains taxes. That is all for investment properties or any other property that is classified as not your primary residence.

My Thoughts On If You’re Considering Selling Your Residence

In some cases, it certainly can make sense. Especially when the plan all along was to eventually sell and move:

    • Into Assisted living/Independent Facility
    • Out of the country
    • In with an adult child/relative
    • To a rental property/apartment
    • To a part of the country/state that is more affordable

Now may be a great time to execute this plan and sell. As always there are possible downsides, so contact us to run through your unique details before pulling the trigger.

Be careful if you’re selling but you plan to buy another home. The problem with selling your house at all-time highs is turning around and buying at all-time highs. It may end up being a wash or worse, more expensive than just staying put.

    • First there are closing costs/realtor fees to keep in mind.
    • Also, your property tax bill may have just increased because the home you bought was appraised at the new shiny value that you just bought it for. Whereas if you live in Texas your old home’s property taxes, by Texas State Homestead Exemption Law, can’t increase more than 10% each year.
    • If you’re getting a mortgage on the new home, you’re also likely getting a higher interest rate than your previous mortgage. If interest rates fall in the future then you can refinance but no one is sure if/when that will occur.
    • Be aware of “downsizing” in this market as well. That $200,000 house five years ago might be selling for $400,000 now. Downsizing in this market may not be the cost saver it used to be.

Let us know if you want to discuss your situation or the situation of a loved one to see if it makes sense for you!

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Jeffrey T. Dobyns

CFP®, CLU, CHFC

President, SageSpring 

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Jeffrey T. Dobyns

President, SageSpring 

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.