Taxes When Selling a Home in Las Cruces: What You Need to Know (2025 Guide)

If you’re planning to sell your home in Las Cruces, one of the biggest questions you might have is:

👉 “What taxes will I owe when I sell?”

The good news is that most homeowners don’t end up paying a huge tax bill when they sell. But it’s important to understand the basics so you’re prepared and know what to expect.

🏡 Do You Always Pay Taxes When Selling a Home?

Not always. In fact, many sellers in Las Cruces qualify for the capital gains tax exclusion, which means you can keep a big chunk of your profit tax-free.

💵 Capital Gains Tax Basics

When you sell your home for more than you paid, the profit is called a capital gain. The IRS normally taxes capital gains, but there’s a special rule for homeowners:

• Single sellers can exclude up to $250,000 of profit.
• Married couples filing jointly can exclude up to $500,000 of profit.

Example:

If you bought your Las Cruces home for $200,000 and sold it for $350,000, your profit is $150,000. If you qualify for the exclusion, you pay no federal tax on that gain.

✅ Who Qualifies for the Exclusion?

To qualify, you must:

1. Own the home for at least 2 of the last 5 years.
2. Live in the home as your primary residence for at least 2 of the last 5 years.
3. Not have claimed this exclusion on another home sale in the past 2 years.

Most Las Cruces homeowners selling their primary residence meet these requirements.

📊 What About Investment or Rental Properties?

If the home you’re selling was a rental or investment property, the rules are different. You may owe capital gains tax on your profit. You might also face depreciation recapture, which means you’ll pay taxes on the deductions you claimed while renting out the home.

This is where talking with a tax professional is essential — especially if you own multiple properties in the Las Cruces area.

🌟 Other Taxes & Costs to Keep in Mind

• Property Taxes – You’ll need to pay property taxes up to the date of closing.
• New Mexico Taxes – New Mexico generally follows federal capital gains rules, but you may owe some state tax on your profit if it’s above the exclusion.
• Seller Costs – Don’t forget closing costs, title fees, and any concessions you agree to as part of the deal.

🧮 Ways to Reduce or Avoid Taxes

• Use the Primary Residence Exclusion – Most sellers qualify.
• Track Home Improvements – Major upgrades (like a new roof, kitchen remodel, or addition) increase your cost basis, which reduces your taxable gain.
• 1031 Exchange – If you’re selling an investment property and buying another, a 1031 exchange can let you defer taxes.

✅ The Bottom Line

For most homeowners in Las Cruces, selling your primary residence means you won’t owe federal taxes on your profit — as long as you meet the ownership and residency rules. But if you’re selling an investment property or have higher gains, you may face some tax obligations.

📲 Thinking about selling your home? I’ll walk you through not only pricing and marketing but also connect you with trusted tax professionals so you know exactly what to expect.

#LasCrucesRealtor #HappyLifeRealEstate #LasCrucesHomes #HomeSellingTips #RealEstateTax #LasCrucesLiving