Gains from the sale, exchange or other disposition of any kind of property are taxable under the Pennsylvania personal income tax (PA PIT) law. Capital Gains Tax is applied to the "gain" you make on the sale of a home.Here we're going to try and lay out some tips for selling your house in Pennsylvania which include how to qualify for a Capital Gains Tax Exemption. When selling a house in Pennsylvania there are two main categories of tax that typically apply: Capital Gains Tax; Transfer Tax. Excluded from Pennsylvania-taxable income are capital gains from the sale of a principal residence for all taxpayers who satisfy ownership and use requirements. You must report the sale of a home if you received a Form 1099-S reporting the proceeds from the sale or if there is a non-excludable gain. A capital gains tax is a type of tax on the profit obtained when an asset, such as real estate property, has increased in value and is sold. Capital gain – the difference between the basis and the property's gross sales price – is subject to PA and Federal income taxes. Philadelphia and Chester, for example, levy the state's highest local income tax rate of 3.75 percent. To claim the tax break, the property you are selling must be considered your primary Pennsylvania residence.
