The 2025 tax planning season is already underway: now’s the time to review your numbers and make a plan that fits your goals.
If you’re planning to sell your Pittsburgh home in 2025, there’s more to think about than just the market price. The past few years have seen steady property value growth across Allegheny County — and while that’s great news for your bottom line, it also means you could be looking at a higher tax bill when it’s time to sell.
The silver lining? Many homeowners don’t realize how much control they actually have over what they owe. From capital gains exclusions to deductions tied to improvements, there are several tax benefits of selling your home that can help you walk away with more of your profit.
The key is understanding how taxes on the sale of your home really work, and how to make those rules work for you. For example, your home’s ownership length, usage, and even certain renovation costs can determine whether part (or all) of your gain is tax-free. If you’re not sure what qualifies, our guide on how to avoid capital gains tax when selling your house breaks down the main IRS rules to help you get started.
With the 2025 tax planning season already underway, let’s review your numbers and make a plan that fits your goals.
Do You Have to Pay Taxes When You Sell Your Home?
The short answer: it depends. You’re not automatically taxed just because you sold your home, because it all comes down to how much profit you made and whether you qualify for an IRS exemption.
When you sell, the IRS looks at your capital gain, which is the difference between what you sold the house for and what you originally paid, adjusted for closing costs and any major improvements. So, if you bought your home for $250,000, invested $30,000 in upgrades, and sold it for $400,000, your gain would be roughly $120,000 after adjustments.
The good news is that in many cases, you don’t owe anything at all. Thanks to the IRS primary residence exclusion, homeowners can exclude up to $250,000 of profit from taxes if filing individually, or up to $500,000 if filing jointly. To qualify, you must have owned and lived in the property as your main residence for at least two of the past five years. Those years don’t have to be consecutive, and even if you sell early due to a job relocation or certain personal circumstances, you may still qualify for a partial exclusion.
In 2025, those exclusion limits remain the same, but your overall tax rate on any gain above the limit will depend on updated IRS capital gains thresholds. With property values climbing in Pittsburgh, it’s smart to check where you stand early and remember that local costs like transfer taxes or closing fees can reduce your taxable gain.
| Filing Status | 0% Rate (up to) | 15% Rate (up to) | 20% Rate (above) |
| Single | $47,025 | $518,900 | Over $518,900 |
| Married Filing Jointly / Qualifying Surviving Spouse | $94,050 | $583,750 | Over $583,750 |
| Married Filing Separately | $47,025 | $291,850 | Over $291,850 |
| Head of Household | $63,000 | $551,350 | Over $551,350 |
If you’re not sure how much you might owe, using a home sale tax calculator can give you a quick estimate. It’s a simple way to see if you’re likely in the clear or if it’s time to plan around capital gains before listing your home.
How Pittsburgh Real Estate Taxes Affect Your Sale
Beyond federal capital gains, it’s important to understand how local Pittsburgh taxes come into play when you sell your home. These don’t always make headlines, but they can add up, and often catch sellers off guard at closing.
In Pennsylvania, the real estate transfer tax is the main local tax applied to property sales. It’s typically 2% of the sale price, but in Pittsburgh and Allegheny County, that amount is split between different taxing bodies:
- 1% to the City of Pittsburgh
- 1% to Allegheny County
- Plus, in many cases, an additional 1% school district transfer tax
That brings the total transfer tax to around 4%, and sellers are usually responsible for half unless negotiated otherwise in the sales contract.
Another common oversight? Prorated property taxes. Since property taxes in Pennsylvania are paid annually, sellers often need to reimburse the buyer for the portion of taxes covering the period after closing. It’s not technically a tax penalty, just a timing issue that can easily be forgotten until you see the final settlement statement.
What Costs Can Be Deducted or Offset?
When it comes to taxes on the sale of a home, not every dollar you spend disappears into thin air. Some of your selling costs can help offset your taxable gain, which can make a noticeable difference, especially if you’re close to crossing the IRS exclusion threshold.
Here are some of the most common deductions and offsets to keep in mind:
- Realtor commissions – If you worked with an agent, their commission can be subtracted from your home’s sale price when calculating your gain.
- Capital improvements – These are upgrades that add lasting value to your home, such as a new roof, remodeled kitchen, windows, or HVAC system. Routine maintenance or minor repairs don’t count, but documented improvements can increase your cost basis and lower your taxable gain.
- Closing costs – Title fees, escrow costs, attorney fees, and recording fees can all be included in your selling expenses.
- Legal and inspection fees – If you paid for legal services, a pre-sale inspection, or repairs required to complete the sale, these may be factored in as selling expenses.
- Moving expenses – While no longer deductible for most individuals, they may still qualify in limited situations (for example, if tied to a business relocation or a move ordered by the military).
The key is documentation. Keep all receipts, invoices, and closing statements, especially for major upgrades or costs directly related to selling. When tax season rolls around, those records help you prove your adjusted cost basis and ensure you’re not paying more than you owe.
When a Cash Sale Might Help Reduce Tax-Related Stress
Sometimes, selling a home isn’t just about finding the right buyer, but timing everything right. For some Pittsburgh homeowners, tax considerations can be the final push toward choosing a simpler route.
If you’re facing major repairs, drawn-out upgrades, or delays that could push your closing into the next tax year, a cash sale can help you wrap things up on your own timeline. It’s also a practical option in estate or probate situations, where simplicity, clean documentation, and quick resolution often matter more than squeezing out every last dollar from the market.
With a direct sale, you don’t have to worry about showings, contingencies, or whether a deal will close before December 31st. You choose the closing date, and the process moves as fast as you need it to — often in a matter of weeks.
At HomeBuyers of Pittsburgh, we make that process simple and transparent. As the #1 professional home buyer in the region, our team has purchased more than 750 homes across Pittsburgh, helping local homeowners sell quickly while navigating their real estate tax situations with confidence. We’ll walk you through your options, help you understand the numbers, and make sure your sale aligns with your financial and tax goals.
If you’re thinking about selling and want to skip the guesswork, call 412-900-1353 or email info [at] urbanpgh.com. We can help you plan your sale, time your closing, and take the stress out of the process – all while giving you a fair, fast cash offer for your home.
