You're likely putting in a lot of effort and time when you list your home. While you're likely making some updates to your home to make it open-house-ready, you are probably also trying to find a home for your family. You may also be concerned about whether you will have to pay tax on any gains or profits from the sale of the house.

As in any other case, it is best to consult a tax professional for tax advice. Here's a quick overview of the tax implications of selling a primary residence or vacation home.

Are You Liable For Capital Gains Taxes?

Home sellers don't have to pay capital gains taxes for the first $250,000 (individual), or $500,000 (married couple), in their home sale profit. This is provided that the home is their primary residence, and they have lived there for at least two years.

Capital gains taxes will be charged if you have gains exceeding $250,000 or $500,000. The capital gains tax rate varies depending on which tax bracket you are in. It can be either 0 percent, 15%, or 20 percent. Gains are calculated by subtracting the purchase cost from the sale price. Capital gains taxes will not be charged on any amount above $250,000 for individuals or $500,000 for married couples. If you are an individual who made $300,000.00 in profit from the sale of your house, capital gains taxes would only be payable on $50,000

A Zillow analysis found that a seller who sold the median property of their city would have to pay capital gains tax after only four years of ownership in just 14 cities across the country. Capital gains taxes are not the norm for many sellers. It is a rare event. Unless your home is in a highly desirable area or you have a home that has appreciated tremendously, you won't need to pay capital gains tax on the sale of your home.

You Should Also Consider Other Taxes

Even though you won't have to pay capital gains taxes when you sell your house, there will be some unavoidable taxes that you will most likely have. The seller is responsible for paying property taxes until the house is sold. The buyer will be responsible for the taxes after that date. Transfer taxes may also apply. These are charges that the seller pays in order to transfer title from one person. The tax rate for this is very low at around 1 percent, give or take. You might be required to pay HOA transfer fees, or all or part thereof, if you move prior to you usually paying your dues.

The tax rules for selling your primary residence can be quite straightforward. However, the rules for selling a vacation or second home are more complicated.

Guidelines For Second Homes And Vacation Homes

You might have to pay capital gains tax depending on whether your vacation home is a primary residence or a secondary one. The exclusions for primary residences don't apply to all homes. Vacation homes and secondary homes are considered personal capital assets by the Internal Revenue Service (IRS). Once they are sold, capital gains tax will be due.

IRC Section 1031 allows you to defer capital gains taxes in certain cases. There are many tax rules that will apply to your situation, including whether it is a vacation home, a rental property, or a property being used for investment.