---
title: Primary Home Sale Tax Exclusion
description: Primary Home Sale Tax Exclusion
image: https://info.ongandcompany.com/hubfs/homeforsale.jpg
---

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# Primary Home Sale Tax Exclusion

[Richard Ong](https://info.ongandcompany.com/blog/author/richard-ong) / June 08, 2018 /

[Real Estate](https://info.ongandcompany.com/blog/topic/real-estate), [Tax Planning](https://info.ongandcompany.com/blog/topic/tax-planning)

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# **How to lock down the home sale exclusion**

Good news if you're selling your home: The home sale exclusion wasn't touched by the massive tax law changes. Arguably one of the biggest tax breaks to be left intact, it allows you to exclude capital gains tax on the first $250,000 in profit from a sale of a home. The maximum home sale exclusion is doubled to $500,000 if you're married and file jointly.

**How the exclusion works**

The basic requirements are relatively simple. To qualify, you must have owned and used the home as your principal residence at least two of the previous five years. For example, if you live in a home for two years and then move full-time to a vacation home for three years, you can still qualify for the exclusion on the sale of the first home.

Consider these factors if you're determining whether or not you can take advantage of the home sale exclusion:

- The years you own and use your principal home don't have to be consecutive. For instance, you might live in a principal residence for one year, switch to another home in the second year and then move back to the first home in the third year.
- Joint filers can claim the maximum exclusion if either spouse owned the home for at least two out of the last five years leading up to the sale date, both spouses have lived in the home for two out of the five years and neither spouse has elected the exclusion within the last two years. This could be crucial for recently divorced or remarried taxpayers.
- Generally, a short temporary absence won't count against you. A college professor on sabbatical or snowbirds spending winters in Florida should be OK.
- If you split time between two homes during the year, the place where you stay most often is generally treated as the principal residence. Therefore, to claim the exclusion for a home, make sure you reside there more than half the year for at least two years.

You may qualify for a partial exclusion if you sell a home before you meet the two year requirement due to an employment change, health issue or some other unforeseen event. In this case, then exclusion is prorated based on your use.

Call us if you have questions about how the home sale exclusion could help you save on your 2018 tax bill.

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