Do I have to pay capital gains tax when I sell my home in Oregon?  

You may have to pay capital gains tax when selling your home in Oregon, but many homeowners qualify for exclusions. YogaBug Real Estate helps you understand if your sale meets IRS requirements for a tax-free gain. 

Let’s Talk About Taxes—Without the Jargon 

When you sell your Portland home, you might make a profit—and that’s where capital gains tax could come in. But here’s the good news: Most Portland homeowners qualify for a tax exclusion that keeps you from paying anything at all. 

At YogaBug Real Estate, we break things down clearly, and when tax questions get more complex, we’ll connect you with a trusted CPA or financial advisor who can help. 

What Is Capital Gains Tax—And When Does It Apply? 

Capital gains tax is what the IRS charges when you sell something valuable (like a house) for more than you paid. It’s a federal tax on your profit. 

But you don’t always have to pay it. If the home is your primary residence, and you meet a few simple criteria, you could exclude up to $250,000 (single) or $500,000 (married filing jointly) of your profit.  

Do You Qualify for the IRS Exclusion? 

To exclude your gain, you need to meet two basic requirements: 

1. Ownership Test – You’ve owned the home for at least two years out of the past five before the sale. 

1. Use Test – You’ve lived in the home as your primary residence for at least two years during that five-year window. 

If both are true, you may not owe anything in capital gains tax—even if your home appreciated significantly. 

Example: 

You bought your home in SE Portland in 2017 for $400,000 and sell it in 2025 for $650,000. That’s a $250,000 gain. If you’re single and meet the IRS tests, that profit could be entirely tax-free. 

What About Oregon State Taxes? 

Oregon doesn’t have a separate capital gains tax rate like some states. But it does tax capital gains as ordinary income. That means if you don’t qualify for the federal exclusion, your profit might increase your overall state income tax rate (up to 9.9%). 

When You Might Still Owe Capital Gains Tax 

Not every seller qualifies for the IRS exclusion. You may owe capital gains tax if: 

• You didn’t live in the home for 2 out of the last 5 years 

• You rented it out as an investment property 

• You used the exclusion recently (it can only be used once every two years) 

• You sold a second home or inherited property without living in it 

This is why a conversation with a tax pro matters. Yoga Bug Real Estate can help you line up that support. 

Plan Ahead and Avoid Surprises 

Selling a home is exciting—but unexpected tax bills aren’t. At Yoga Bug Real Estate, we help you understand not just how much your home might sell for, but how much you’ll actually keep after fees and potential taxes. 

We also connect you with local, trusted tax professionals who know Oregon’s rules inside and out.  

Always Talk to a Tax Professional 

Even though we know Portland real estate inside and out, we’re not licensed tax advisors. For anything tax-related—especially if your situation involves rental property, inheritance, or recent sales—it’s best to get guidance from a CPA or financial planner.  

Let’s Prep Your Sale the Smart Way 

Thinking of selling your home in Portland? We’re here to guide you through it mindfully and clearly—so you know what to expect, financially and emotionally. 

Reach out to YogaBug Real Estate today to start with a realistic, confident plan tailored to you.