Selling a home in Nevada can bring new opportunities, whether you're relocating within Reno, Sparks, or Carson City, or moving on from your property in Dayton, Fernley, or Fallon. A common question homeowners have is, “What taxes do I pay when I sell my house?” Knowing about these taxes helps you prepare and keep more of your proceeds. At Craig Team Realty at eXp, we specialize in assisting sellers across Northern Nevada, including Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, and Verdi. We'll explain the key taxes you may encounter when selling your home in Nevada.
Key Taxes Involved in Selling a Home in Nevada
When selling a house in Nevada, the primary taxes are the federal capital gains tax and the Nevada real property transfer tax. Since Nevada has no state income tax, there's no state capital gains tax to consider. This is helpful for sellers in areas like Reno or Sparks. We'll detail these taxes below to give you a clear picture.
Federal Capital Gains Tax Overview
This tax applies to the profit from selling your home, known as the capital gain. To find your gain, subtract your adjusted basis (original purchase price plus improvements and certain costs) from the amount realized (sale price minus selling expenses). For instance, if you purchased a home in Carson City for $300,000, spent $50,000 on improvements, and sold it for $500,000, your gain would be $150,000.
Exclusion for Primary Residences Under Section 121
Many sellers qualify for the Section 121 exclusion, which lets you exclude up to $250,000 of gain if single, or $500,000 if married filing jointly. To qualify, you must:
- Have owned the home for at least two years.
- Have used it as your main home for at least two of the five years before the sale (not necessarily consecutive).
- Not have claimed this exclusion on another home sale in the past two years.
If you're selling your main home in Fernley with a $200,000 gain as a single filer, you might owe no tax if under the $250,000 limit. For a married couple in Minden with a $400,000 gain, it could be fully excluded. Special rules apply for military personnel, allowing a suspension of the five-year period for up to 10 years during extended duty.
Short-Term and Long-Term Capital Gains Rates
If the exclusion doesn't apply fully, rates depend on ownership length. Short-term gains (one year or less) are taxed at ordinary income rates, up to 37%. Long-term gains (over one year) are taxed at 0%, 15%, or 20%, based on your income. For 2025, the 0% rate applies to taxable income up to $48,350 for singles or $96,700 for married filing jointly; 15% for higher amounts up to $533,400 for singles or $1,066,800 jointly; and 20% above that. A seller in Gardnerville with a long-term gain might pay 15% if in the middle income bracket.
Ways to Adjust Your Basis and Reduce Gains
You can increase your basis to lower taxable gains by including:
- Buying costs like title fees, legal fees, or surveys.
- Improvement costs, such as a new roof or kitchen remodel in your Dayton home.
- Selling expenses, including real estate commissions or staging fees.
Repairs like painting don't count, but major additions do. Keep records and consult a tax professional for accurate calculations, especially for unique situations like inherited homes or business use.
Nevada Real Property Transfer Tax Details
This tax, collected by the county recorder upon deed recording, is $1.95 per $500 of the home's value (or fraction thereof) for properties over $100. Some counties add fees: Washoe and Churchill add $0.10 (total $2.05), while Clark adds $0.60 (total $2.55). Most Northern Nevada counties, like Carson City, Douglas, Lyon, and Storey, use the base rate.
For a $400,000 sale in Virginia City (Storey County), the tax is $1,560 ($400,000 ÷ 500 × $1.95). In Reno (Washoe County), add $80 for a total of $1,640. Sellers usually pay, but in markets favoring sellers, like in Sun Valley or Silver Springs, you might negotiate sharing with the buyer.
Common Exemptions for the Transfer Tax
You may avoid this real property transfer tax in cases like:
- Transfers to immediate family members, such as parent to child in Stagecoach.
- Transfers due to divorce, death, or between spouses.
- Changes in identity or form, like to a trust, or between joint tenants in Silver City.
- Government transfers or certain corporate reorganizations.
Submit a Declaration of Value form to claim exemptions; your real estate agent in Reno or Carson City can assist.
Additional Costs Often Mistaken for Taxes
Beyond taxes, sellers face costs that add up:
- Prorated Property Taxes: Pay for the time you owned the home that year. Selling mid-year in Moundhouse means you cover up to the sale date, with the buyer handling the rest.
- Closing Costs: Include escrow fees, title insurance, and commissions (typically 5-6% of the sale price in Nevada, split between agents). Negotiate these with your realtor in Verdi or Genoa.
An experienced real estate agent can help reduce these through effective strategies.
Strategies to Lower Your Tax Burden When Selling
Consider these steps to minimize taxes:
- Meet Residency Requirements: Ensure your home in Fallon or Fernley qualifies as primary to use the capital gains exclusion.
- Track Improvements: Document upgrades to your Minden or Gardnerville home to raise your basis.
- Negotiate Fees: In a strong market in Reno or Sparks, work with your agent to have buyers cover part of the transfer tax.
- Seek Professional Advice: Tax rules vary; consult a tax expert for personalized guidance, especially for rental properties in Sun Valley.
Remember, if your mortgage debt is forgiven in 2025, it may be excludable from income under extended rules, but check with a professional.
Partnering with Craig Team Realty at eXp
Navigating taxes and costs when selling in Northern Nevada—from Reno and Sparks to Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi—requires local knowledge. At Craig Team Realty at eXp, led by Cassie Craig, we're committed to making your sale smooth and profitable. We understand each community's market and help with everything from pricing to tax considerations.
Our approachable team provides reliable support, ensuring you feel confident throughout.
Take the Next Step in Selling Your Northern Nevada Home
If you're ready to sell or have questions about taxes in Northern Nevada, contact Craig Team Realty at eXp at (775) 306-7591. We're here to guide you toward a successful sale in Reno, Sparks, Carson City, or any of our served areas. Get in touch today!