09/26/2026
🏡 SELLING YOUR HOME? LET’S TALK CAPITAL GAINS.
One of the most common questions homeowners have is: “Will I owe capital gains tax when I sell my home?”
For many homeowners selling their primary residence, the answer may be no.
Under current federal tax rules, you may be able to exclude up to:
• $250,000 of gain if you’re single
• $500,000 of gain if you’re married filing jointly
Generally, you must have owned the home and used it as your primary residence for at least 2 of the 5 years before the sale. You also generally cannot have claimed the exclusion on another home sale during the previous two years.
And remember — capital gain is not simply the difference between what you paid and what you sold it for. Your adjusted cost basis can include certain improvements and other qualifying costs, which can affect the amount of your actual gain.
What about Delaware?
Delaware generally begins its income-tax calculation with your federal adjusted gross income. That means if the gain on your primary residence is properly excluded from federal income under these rules, it generally isn’t added back and taxed separately by Delaware.
🏖️ SECOND HOMES & VACATION HOMES ARE DIFFERENT
The primary-residence exclusion generally does not apply to a property that is simply a second home or vacation home. If you sell one for a profit, the gain may be taxable.
If a second home, vacation property or rental was converted to or from your primary residence, the rules become more complicated. The amount of time it was used as your primary residence, periods of other use and any depreciation claimed can affect how much of the gain is taxable.
Bottom line: Selling a home doesn’t automatically mean you’ll owe capital gains tax — but how you used the property matters.
Always speak with a qualified tax professional or CPA about your specific situation before making tax decisions.
The federal figures and 2-out-of-5-year test above come directly from the IRS. The IRS also specifically says that when someone owns more than one home, the exclusion applies only to the qualifying main home, and rental/business use can introduce additional rules, including depreciation that cannot be excluded.
If you’re considering selling, please contact Team Freebery today!
302-420-8606
Or visit Team Freebery
Team Freebery
Delaware and Pennsylvania Homes For Sale - Team Freebery Realtors