Facebook
X
Pinterest
Copy Link
Understanding Real Estate Transfer Taxes and Capital Gains in San Jose, CA
By Bonnie Michalek, Your San Jose Real Estate Expert
If you’re planning to sell your home in San Jose, California, it’s essential to understand the costs associated with transferring ownership—especially real estate transfer taxes and capital gains taxes. These two items can significantly affect your net proceeds, and being prepared can help you make the most of your sale.
What Are Real Estate Transfer Taxes in San Jose?
When a property changes hands, both the City of San Jose and Santa Clara County impose a documentary transfer tax. This tax is typically based on the property’s sale price and is due when the deed is recorded.
- Santa Clara County collects $1.10 per $1,000 of the property’s sale price.
- The City of San Jose adds an additional $3.30 per $1,000, bringing the total to $4.40 per $1,000.
- If your home sells for over $2,300,000, an additional tiered transfer tax will apply based on the property’s sale price.
For example, on a $1,000,000 sale, the total transfer tax would be approximately $4,400. Typically, this cost is split between the buyer and seller, but it’s negotiable and can depend on the local market or terms of the purchase contract.
Capital Gains Taxes for Longtime Homeowners
If you’ve owned your San Jose property for many years, you may also face capital gains taxes when selling—especially with the Bay Area’s steady appreciation over the decades.
Capital gains are the profit earned from selling your home for more than what you originally paid (plus improvements). However, the IRS offers capital gains exclusions for primary residences:
- $250,000 exclusion for single filers
- $500,000 exclusion for married couples filing jointly
To qualify, you must have owned and lived in the home for at least two of the past five years before the sale.
If your profits exceed the exclusion, the remaining amount may be subject to federal and California state capital gains taxes. Consulting a qualified tax professional can help you explore ways to reduce your taxable gain—such as adjusting your cost basis for home improvements or timing the sale strategically.
Planning Ahead with a Trusted San Jose Realtor
Understanding how transfer taxes and capital gains affect your bottom line is key to a successful real estate transaction. As a local San Jose real estate expert, I help my clients plan ahead—ensuring they know what to expect, how to maximize their net proceeds, and when to bring in the right financial and tax professionals.
If you’re considering selling your home in San Jose or the greater Santa Clara County area, let’s connect. I’ll guide you through the process with transparency, strategy, and the local insight you need to make your next move confidently.
Bonnie Michalek
(408) 981-2901
