{"id":17878,"date":"2025-10-07T04:00:21","date_gmt":"2025-10-07T11:00:21","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=17878"},"modified":"2025-10-07T22:27:10","modified_gmt":"2025-10-08T05:27:10","slug":"capital-gains-on-sale-of-second-home","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/capital-gains-on-sale-of-second-home\/","title":{"rendered":"Will I Pay Capital Gains on the Sale of My Second Home?"},"content":{"rendered":"

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%<\/a>, depending on your tax bracket. But you may be able to mitigate those taxes.<\/p>\n

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.<\/p>\n

To provide you with the most up-to-date information, we spoke with real estate attorney Koert Brown of Rammelkamp Bradney<\/a> in Illinois and AJ Pettersen, a top Minneapolis real estate agent.<\/p>\n\n\n\n\n\n

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Selling a Second Home? Work With a Top Agent<\/h3>\n

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.<\/p>\n \n

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Selling a second home vs. selling a primary residence<\/h2>\n

When selling a primary home, the seller generally doesn\u2019t have to worry about paying taxes on profits \u2014 up to a certain point. The IRS allows a single-filer homeowner to forgo paying taxes on up to $250,000<\/a> gained from the sale, and a married couple filing jointly can exclude up to $500,000 in profit.<\/p>\n

Brown says a property is considered a primary residence if the owners occupy it for the greater part of a year (more than six months) for at least two of the past five years, and can prove it. For audit purposes, proof is determined by where the owner is employed, banks, receives mail, and attends community places like recreational clubs.<\/p>\n

When selling a second home, you typically have to pay tax on capital gains at a rate of up to 20%<\/a> in 2025, depending on your tax bracket.<\/p>\n

A property is considered your second home if it\u2019s a vacation home or an investment property that you rent out<\/a>.<\/p>\n

How much you\u2019ll pay in capital gains tax depends on several factors:<\/p>\n