Do I pay capital gains tax when selling my house in Dallas?

If you sell your home in Dallas, you may owe capital gains tax depending on your profit, how long you lived there, and IRS exclusions. Many homeowners qualify for exemptions, but it’s important to understand the rules before selling.

What Are Capital Gains on a Home Sale?

Capital gains are the profit you make when selling your property. It’s calculated as the difference between your selling price and your purchase price, adjusted for upgrades and selling costs. For Dallas homeowners, rising property values make understanding this especially important.

IRS Exemptions That May Save You Money

The IRS allows many sellers to exclude a portion of their profit from taxation. If you lived in your Dallas home for at least two of the last five years before selling, you may exclude up to $250,000 of profit if single, or $500,000 if married filing jointly. This exemption means many Dallas homeowners never actually pay capital gains taxes when selling their primary residence.

Why Dallas Homeowners Are Asking This Now

Home values across Dallas have surged over the past decade. In neighborhoods like Oak Cliff, Kessler Park, and Lakewood, long-time owners who bought homes for under $200,000 often see today’s values at $500,000 or more. That appreciation means more sellers are reaching the IRS exclusion limits.

Factors That Determine Whether You Owe Taxes

Here are the main things the IRS considers:

• How long you owned and lived in the property (residency rule).

• Whether the property was your primary residence or an investment.

• Your profit (selling price minus purchase price, plus improvements and costs).

• Any depreciation claimed if it was ever a rental property.

A Dallas Case Study

Let’s say you bought a North Oak Cliff bungalow for $250,000 in 2012. In 2025, you sell it for $600,000. That’s a $350,000 profit. If you’re married, $500,000 is exempt, meaning you pay no capital gains tax. If you’re single, $250,000 is exempt, and you may owe taxes on $100,000. This is why homeowners often ask this question before listing.

Why Work with Eugene Gonzalez, Realtor?

Eugene Gonzalez is a Top 1% Dallas Realtor with decades of experience in neighborhoods across Oak Cliff, Bishop Arts, and Preston Hollow. He combines real estate expertise with a finance background, helping you understand both your sale price and the potential impact on your bottom line. Eugene regularly advises Dallas homeowners on preparing their homes for sale, setting the right price, and navigating financial questions with trusted tax professionals.

Smart Steps Before You Sell in Dallas

Before listing your home, Eugene suggests:

1. Gathering documentation of home improvements to reduce taxable gains.

2. Confirming your residency period for IRS exclusion eligibility.

3. Factoring in agent commissions, staging, and closing costs as deductions.

4. Consulting with a licensed tax advisor for accurate guidance.

Neighborhood Insights: Oak Cliff to Preston Hollow

In Oak Cliff, homes near Bishop Arts have seen fast appreciation, often pushing profits higher. In Preston Hollow and Highland Park, luxury home sales bring large profits where exemptions matter even more. Whether you’re selling a mid-century ranch in Wynnewood or a Tudor in Kessler Park, knowing your tax outlook helps you plan.

Professional Disclaimer

This blog is for educational purposes only. It is not tax, legal, or financial advice. Always consult with a licensed professional before making financial decisions regarding capital gains or selling your Dallas home.

Get Clear Answers Before Selling

The short answer is yes—capital gains tax may apply when selling a home in Dallas, but many homeowners qualify for exemptions. Don’t leave money on the table. Partner with Eugene Gonzalez, Realtor, to navigate both the Dallas market and your financial outlook. Contact Eugene today for a personalized home valuation and selling strategy.