TL;DR — the short version
Most long-time owners won’t owe federal capital gains tax on their home sale. If you owned and lived in it 2 of the last 5 years, you can generally exclude up to $250,000 of gain ($500,000 married filing jointly).
Your “gain” is sale price minus your cost basis, and basis includes the purchase price plus qualifying improvements. Keep your receipts.
Kansas has no real estate transfer tax, which keeps selling costs lower than in many states.
Your next home’s property taxes depend on its appraised value × 11.5% × the local mill levy, so compare real bills before you buy.
Kansas offers property tax relief programs for some seniors, with income limits. Check eligibility with the Kansas Department of Revenue.
Downsizers in Johnson County have often owned their homes for decades, so it’s natural to worry about taxes on a big gain. For many people the news is better than expected, but the details matter.
This guide covers the federal home-sale exclusion, how to figure your gain, Kansas-specific costs, and how property taxes change when you right-size. It’s general information, so bring your situation to a tax professional. For the full plan, see Downsizing in Johnson County.
1. The Home-Sale Exclusion
Filing status | Gain you can generally exclude |
|---|---|
Single | Up to $250,000 |
Married filing jointly | Up to $500,000 |
To qualify, you generally must have owned and lived in the home as your main home for at least 2 of the 5 years before the sale, and not used the exclusion on another home in the past 2 years.
2. Figuring Your Gain
Gain = sale price − selling costs − cost basis
Cost basis starts with what you paid, plus certain closing costs.
Add qualifying improvements, like additions, a new roof or a kitchen remodel. Routine repairs usually don’t count.
Selling costs like commissions and some closing costs reduce your gain.
What to do: Gather your original closing statement and improvement receipts now. They can lower your taxable gain.
3. Kansas-Specific Costs
No state real estate transfer tax on the sale.
No mortgage registration tax if you finance your next home (it ended January 1, 2019).
Kansas income tax may apply to any gain above the federal exclusion. Ask your tax professional.
4. Property Taxes on Your Next Home
Johnson County property taxes are figured as appraised value × 11.5% × your local mill levy. Downsizing to a lower-value home usually lowers your bill, but HOA dues and a different levy can change the picture.
What to do: Look up the real tax bill for any home you’re considering on the Johnson County Property Tax Viewer.
5. Senior Property Tax Relief in Kansas
Kansas has refund programs that can help some older homeowners with property taxes, with age and income limits. Rules and limits change, so check current eligibility with the Kansas Department of Revenue.
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Frequently Asked Questions
Do I pay capital gains tax when I sell my house in Kansas?
Many long-time owners don’t. The federal exclusion generally covers up to $250,000 of gain ($500,000 married filing jointly) if you owned and lived in the home 2 of the last 5 years. Gains above that may be taxable.
Does Kansas have a transfer tax on home sales?
No. Kansas doesn’t have a state real estate transfer tax.
Do home improvements reduce capital gains?
Qualifying improvements are added to your cost basis, which reduces your gain. Keep receipts.
Will downsizing lower my property taxes?
Usually, if your next home has a lower appraised value, but your local levy and HOA dues also matter.
Related Resources
The Johnson County Downsizing Guide — free guide
What’s My Home Worth? — free estimate
This article is general information, not tax, legal or financial advice. Tax rules change. Confirm your situation with a qualified tax professional.
Free guide
The Johnson County Downsizing Guide
A calm 12-month plan for selling the family home, timing your next purchase, and right-sizing.