CT Real Estate Capital Gains Tax: What Connecticut Home Sellers Should Know

What is capital gains tax when selling a home in Connecticut?
Capital gains tax in Connecticut real estate is the tax you may owe on the profit from selling a home, and understanding it before you list can help you keep more of your equity.

What Is Capital Gains Tax in Connecticut Real Estate?

When you sell a home for more than you paid, the profit may be subject to real estate capital gains tax. Your taxable gain is typically calculated by subtracting your purchase price, qualifying improvements, and certain closing costs from your sale price.

As a Connecticut home seller, you should plan for both federal capital gains tax and Connecticut state income tax.

Primary Residence Capital Gains Exclusion

Many sellers ask Heike about this—and it’s the most important rule to know.

If the home is your primary residence, you may qualify to exclude:

• $250,000 of profit (single filers)

• $500,000 of profit (married filing jointly)

To qualify, you must have owned and lived in the home for at least 2 of the last 5 years. This exclusion means many sellers owe no federal capital gains tax at all.

How Connecticut Taxes Capital Gains

Connecticut does not have a separate capital gains rate. Instead, profits are taxed as ordinary income at the state level. This makes timing your home sale an important part of your overall strategy.

This is why Heike Severine advises sellers to understand their numbers before listing—not after accepting an offer.

Selling a Rental or Second Home in CT

If you’re selling a rental property or second home, the primary residence exclusion usually doesn’t apply. These sales may also involve depreciation recapture, which can increase your tax liability.

Final Takeaway for CT Home Sellers

Capital gains tax doesn’t mean you shouldn’t sell your home—it means you should plan smart. When sellers understand CT real estate capital gains tax rules early, they make better pricing and timing decisions.

As Heike Severine, New Haven County Realtor and CT Real Estate Expert with Coldwell Banker, Heike helps sellers focus on what matters most: what you walk away with after the sale, not just the list price.

Call to Action

If you’re considering selling in New Haven County, connect with Heike Severine to talk through your timeline, pricing, and capital gains tax considerations. A clear plan now can protect more of your profit later.

When you’re ready, let’s connect.

Heike Severine, Realtor

📞 860-385-6315 |

✉️ Heike@CTRealEstateExpert.com

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