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Does Texas Tax Profit From Selling Your Home? (2026)

Updated October 7, 2026. Quick answer: No. The Texas Comptroller of Public Accounts says “Texas has no state income tax”, so Texas does not tax the profit on selling your home. Federal tax is separate.

Texas tax on home sale profit at a glance

ItemWhat the documents say
Profit on your main homeNo individual income tax to conform: Texas taxes none of the gain
Rate on gain above the exclusionNo rate: no individual income tax
Collected at the saleNone found in the documents read
SourceTexas Comptroller of Public Accounts

What the Texas documents say

The Comptroller’s Fiscal Notes publication for December 2025 says “Texas has no state income tax”. A 2016 issue of the same publication says “Texas does not have a personal income tax”.

Neither article mentions the sale of a home. The conclusion for a home sale follows from the absence of any personal income tax.

What the federal exclusion requires

Most state answers start here. The statute says “Gross income shall not include gain from the sale or exchange” of property that, during the five years before the sale, you owned and used as your principal residence for periods adding up to two years or more. The limit is “shall not exceed $250,000”, or $500,000 for a husband and wife who make a joint return and meet the statute’s conditions. See CMG’s home sale taxes page and exclusion calculator.

A worked example at a $400,000 gain

An illustration, not a return: a married couple in Texas sells their main home with a gain of $400,000. On the documents read Texas levies no individual income tax, so the state’s income tax on that gain is $0 whether or not the federal exclusion applies. Federal tax is separate and outside this page: if the couple meets the statute’s ownership and use tests, a gain of $400,000 is below the $500,000 joint exclusion, so no federal income tax is owed on it either.

What is collected at the sale

The documents read name no Texas tax collected at a home sale. That is a gap in what was read, not a statement that none exists; ask the closing agent.

What changes in 2026

The documents read for Texas announce no change for 2026 that is specific to the tax on a home sale. The forms and instructions read are for tax year 2025 or the newest page archived; check the state agency for 2026 forms when they are published.

What the documents do not say

  • Both Comptroller articles are general statements about the tax system. Neither names a closing-time tax, and no statute citation is given because the legislature’s site was not archived.

Common mistakes

  • Assuming the absence of a Texas income tax removes the federal tax on a home sale; the federal exclusion limits and tests still decide the federal result.
  • Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the sale.

Related: home sale taxes, state tax on home sale profit, how Texas taxes capital gains, Texas retirement taxes, and home sale exclusion calculator.

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Sources

Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.

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