Taxes on Selling a House in New York

Capital gains tax

You’ve likely heard the term “capital gains tax,” but what is it?

When you sell a capital asset, like a property that isn’t used for business purposes, any profit you make from the sale is considered a capital gain. Capital assets can include common items like your home or car, but they can also be things like stocks, bonds, or even artwork.

A capital gains tax is simply the tax you may owe on those profits when you report them during the tax year. For example, if you purchased your New York home for $650,000 and sold it a few years later for $750,000, you have earned a capital gain of $100,000, which would be taxed.

Capital gains tax rates differ by state. Some states, like Florida, don’t even have a capital gains tax. In New York, the tax rate varies based on your income bracket, ranging between 4% and 10.9%.

Capital gains are also classified as “short-term” or “long-term” at the Federal level.

2026 capital gains tax brackets

The 2026 capital gains tax brackets determine the rate applied to any taxable gain from your home sale. Understanding where you fall can help you plan and protect more of your proceeds.

2026 short-term capital gains tax brackets

2026 long-term capital gains tax brackets

It’s also possible to have your capital gains excluded at the Federal level, assuming you qualify. The maximum amount of capital gain that can be excluded is $250,000 for single filers, and $500,000 for a married couple that is filing jointly.

According to the IRS Publication 523, you must meet these criteria:

You may still qualify for a partial exclusion if you don’t fit any of the above criteria. Circumstances such as relocating for a job, dealing with a health problem, or having to sell the property of a parent who passed away, among others, can qualify you.

How to report your New York capital gains taxes

• For your federal return, report your capital gains and losses by using the U.S. Individual Income Tax Return (IRS Form 1040) and Capital Gains and Losses, Schedule D (IRS Form 1040).
• For your New York capital gains, use Form DTF1001.

Transfer tax

When you sell your home and officially transfer ownership to the buyer, you’ll usually have to pay a transfer tax, also known as documentary stamp tax or recordation tax. Like other taxes, it’s one of the ways state or local governments raise revenue. Since it’s part of your closing costs, it can also affect how much money you actually take home from the sale.

The amount owed in transfer taxes when selling your home in New York is $1.25 for each $500 of the total transaction value. So, if your home sells for $650,000, you’d pay about $1,625 in transfer taxes.

In New York, the base transfer tax and any additional tax are normally paid by the seller. Buyers generally don’t pay this, unless a contract between the buyer and seller says otherwise.

If the seller doesn’t pay the tax or is exempt, the responsibility can fall to the buyer. If the buyer pays the transfer tax as part of a contract agreement, that amount is not included in the taxable value of the property.

Property tax

Property tax is a yearly tax that homeowners pay based on their property’s assessed value. The amount you owe depends on where your home is located, since property tax rates vary by state and even by local area. According to the Tax Foundation, New York’s effective property tax rate on owner-occupied housing value is typically 1.30%.

Property taxes in New York are usually paid annually or semi‑annually, depending on where you live. In New York City, they can be billed quarterly, typically in January, April, July, and October, or semi‑annually for higher‑valued properties (more than $250,0000), due in January and July. Check with your local county or city tax office to confirm your property tax due dates.

Your taxes are prorated to the day of sale when you sell your home, meaning you’ll only pay taxes for the days of the fiscal year that you owned your home.

The New York Department of Taxation and Finance can provide more information about taxes specific to your city or town here.

Inheritance tax

In some states, if you inherit a home, you may owe taxes. New York, however, is not one of these states. However, you will be responsible for any property taxes owed on the home. It’s also possible that a lien might exist on the property if the previous owner was not up to date on their taxes, which you would be responsible for.

If you decide to sell the inherited home, the concept of a “stepped-up basis” comes into play. The stepped-up basis means the home’s cost basis for tax purposes is set at its fair market value on the date you inherited it, not what the original owner paid. This can significantly reduce capital gains tax if you sell the home soon after inheriting it. Capital gains tax is only applied to the portion of the profit above that stepped-up value.

»Learn more: Want to know exactly how much you’ll walk away with from your home sale? Use our New York closing cost calculator to get a personalized estimate of your selling expenses and see your potential proceeds after closing.

Other selling expenses you might encounter in New York

Title fees: Title fees typically include a title search and title insurance. Title insurance helps protect both the buyer and lender from potential problems with a home’s title. These issues could include things like forged documents, a previously unknown will, or restrictions on the deed that weren’t discovered during the title search. Who pays the title insurance can vary by state, and in New York, this typically falls to the seller.

Settlement fees: Also called escrow fees, settlement fees are usually 1% of the home sale value. This lump sum is charged by the title company, escrow company, or attorney handling the closing process. These fees typically cover the costs of preparing final documents, completing the transaction, and distributing payments to the appropriate parties.  The exact amount and who pays these fees can vary depending on the agreement between the buyer and seller.

Agent commissions: Historically, sellers paid a total commission of around 5% to 6% of the home’s sale price, which was usually split between the listing agent and the buyer’s agent. But after the National Association of Realtors settlement changed how agent fees are handled, buyers now work directly with their agents to negotiate their own commission costs. For sellers, this typically means paying only their listing agent’s commission, which is often around 2.5% to 3% of the sale price, depending on the agreement.

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How to prepare for New York real estate taxes

Real estate taxes don’t need to be intimidating, and they don’t need to catch you off guard. There are several ways you can get an idea of what you’ll owe before the time comes to sell your home, and HomeLight is here to help. Here are some final steps to consider:

• Know your home’s value: Use an online automated valuation model (AVM) tool like HomeLight’s free Home Value Estimator. Having a ballpark idea of what your home might be worth can help you calculate the potential capital gains from the home sale.
• Save the right documents: Know what tax documents you will need to sell before doing so. Consult with your tax professional about the federal and state documents needed in New York and the tax breaks you might qualify for.
• Find a top agent: An experienced real estate agent can guide you through the home sale process. They can help you understand your tax burden and maximize your profits. Our data shows that the top 5% of real estate agents across the U.S. sell homes for 10% more than the average real estate agent.

HomeLight makes it easy to find top real estate agents in your market. From our Agent Match tool to innovative programs like Simple Sale and Buy Before You Sell, we have you covered when it comes to selling your home, ensuring every transaction is simple, certain, and satisfying.

Editor’s note: This post is for educational purposes only, not financial, tax, or legal advice. HomeLight recommends consulting an advisor for guidance tailored to your situation.

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