If you sell a property or investment for more than you paid, that surplus is considered a capital gain and is generally taxable. While the federal government collects taxes on the profit from asset sales, New York State applies its own distinct rules that can create a layered tax situation for residents and even non-residents with property in the state.
Understanding the Primary Residence Exemption in New York
Conversely, non-residents are usually only taxed on capital gains that are directly sourced to New York, such as the sale of property located physically within the state boundaries. The resulting gain is then added to your annual income and taxed according to the progressive New York state income tax brackets, which range from 4% to 10.
If you are a New York resident, you are typically responsible for paying state capital gains tax on income earned from sources worldwide. Under federal law, single filers can exclude up to $250,000 of gain, and married couples filing jointly can exclude up to $500,000, provided they have lived in the home for at least two of the last five years.
How the Primary Residence Exemption Works in New York
30% Top Income The Primary Residence Exemption One of the most critical aspects of capital gains tax in New York is the treatment of your primary home. 45% Upper Middle Income $200,001 – $1,070,000 6.
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