Taxes on Selling a House in Virginia
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Sam Dadofalza Associate EditorClose
Sam Dadofalza Associate EditorSam Dadofalza is an associate editor at HomeLight, where she crafts insightful stories to guide homebuyers and sellers through the intricacies of real estate transactions. She has previously contributed to digital marketing firms and online business publications, honing her skills in creating engaging and informative content.
Selling a home isn’t just about finding a buyer and handing over the keys. It also comes with a few financial decisions along the way. After months of preparing your property and negotiating the deal, the last thing you want is to be caught off guard by unexpected expenses. That’s why it’s important to understand the taxes on selling a house in Virginia before finalizing your sale.
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Some homeowners may owe taxes on their profits, while others may qualify for exclusions that reduce or eliminate what they owe. Here’s what you should know to make the most of your home sale.
Capital gains tax
You’ve likely heard the term “capital gains tax,” but what is it?
When you sell a “capital asset,” which is something you own, such as a piece of real estate, that is not used for a business, any profits that the sale yields are considered capital gains. Capital assets most commonly include things like your home or vehicle, but they can also include stocks, bonds, or art.
A capital gains tax is a tax levied on any capital gains earned during a tax year. For example, if you purchased your Virginia home for $325,000 and sold it a few years later for $425,000, 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 Virginia, the tax rate varies based on your income bracket, ranging between 2% and 5.75%:
|
Tax rate |
Bracket |
| 2% | $0 to $3,000 |
| 3% | $3,001 to $5,000 |
| 5% | $5,001 to $17,000 |
| 5.75% | $17,001 or more |
Additionally, capital gains are classified as either “short-term” or “long-term” at the federal level.
- Capital gains are considered short-term when you sell an asset within a year of buying it. In that case, the profit you make is added to your regular income and taxed based on your tax bracket.
- Capital gains are considered long-term when you’ve owned the asset for more than a year before selling it. For a home sale, the tax rate can vary depending on your income and other financial details.
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
| Tax rate | Single filers | Married filing jointly | Head of household |
| 10% | $0 to $12,400 | $0 to $24,800 | $0 to $17,700 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $17,701 to $67,450 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 | $67,451 to $105,700 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 | $105,701 to $201,775 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 | $201,776 to $256,200 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 | $256,201 to $640,600 |
| 37% | $640,601 or more | $768,701 or more | $640,601 or more |
2026 long-term capital gains tax brackets
| Tax rate | Single filers | Married filing jointly | Head of household |
| 0% | $0 to $49,450 | $0 to $98,900 | $0 to $66,200 |
| 15% | $49,451 to $545,500 | $98,901 to $613,700 | $66,201 to $579,600 |
| 20% | $545,501 or higher | $613,701 or higher | Over $579,600 |
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’re selling your primary residence.
- You’ve owned the home for at least two years in the five-year period before selling it.
- You’ve lived in the home for at least two years within the five-year period before selling it. The years you’ve lived in it don’t need to be consecutive. Certain exceptions to this rule are made for those who are disabled or those in the military, Foreign Service, intelligence community, or Peace Corps.
- You didn’t acquire the home through a like-kind exchange, also known as a section 1031 exchange, within the past five years. This is basically when you swap one investment property for another.
- You haven’t claimed the exclusion on another home in the past two years.
- You aren’t subject to expatriate tax, a government fee paid by those who renounce their citizenship or take up residency in another country.
If you don’t fit any of the above criteria, you may still qualify for a partial exclusion. 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. For more, refer to IRS Publication 523.
How to report your Virginia 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).
- Virginia doesn’t have a separate “capital gains tax” form, and capital gains are included in your state income tax.
Transfer tax
Aside from capital gains tax, Virginia home sellers may also need to account for transfer taxes when selling a home. These are fees charged when property ownership is transferred from one person to another. Transfer tax, also known as documentary stamp tax, recordation tax, or grantor’s tax, is usually based on the home’s sale price.
The amount owed in transfer taxes when selling your home in Virginia is $0.25 for every $100 of the total transaction value. So, if your home sells for $425,000, you’d pay about $1,062.50 in transfer taxes.
Who pays the transfer tax will also depend on the state. In Virginia, the seller typically pays, while the buyer usually pays the county or city deed recording fees.
Like other taxes, these fees help the government bring in revenue. They’re something to keep in mind when figuring out how much money you’ll actually walk away with after selling your home.
Don’t let Virginia transfer tax catch you off guard when selling your home. Use the Virginia Transfer Tax Calculator to see your estimated tax amount and understand this part of your closing costs. It’s a quick way to stay informed before you sell.
Property tax
Property tax is a yearly fee homeowners pay based on the assessed value of their property. Like other taxes, the amount you pay can vary depending on where you live and how much your home is worth.
Virginia’s effective property tax rate on owner-occupied housing value is typically 0.78%. 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 Virginia Department of Taxation 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. Virginia, 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 Virginia 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 Virginia
- 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. In Virginia, 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 Virginia 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. Talk with a tax professional about the federal and state forms you may need in Virginia, as well as any tax breaks or exemptions 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 figure out what you may owe in taxes and keep more money in your pocket. 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.
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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.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.