Will I Pay Capital Gains on the Sale of My Second Home?

Selling your second home? When you sell a vacation home, rental, fix-and-flip, or any second property that is not your primary residence, you will typically be responsible for paying capital gains taxes on any profits you make, at a rate of up to 20%, depending on your tax bracket. But you may be able to mitigate those taxes. In this post, we discuss under what conditions you can minimize your capital gains tax when selling your second home and maximize your profits as a seller. To provide you with the most up-to-date information, we spoke with real estate attorney Koert Brown of Rammelkamp Bradney in Illinois and AJ Pettersen, a top Minneapolis real estate agent. Selling a Second Home? Work With a Top Agent While you will likely have to pay tax on any capital gains realized from the sale of your second home, working with a top agent can take some of the sting out. HomeLight data shows that the top 5% of agents across the U.S. help clients sell their home for as much as 10% more than the average real estate agent, potentially helping to offset the cost of taxes. Selling a second home vs. selling a primary residence When selling a primary home, the seller generally doesn’t have to w...