Updated October 7, 2026. Quick answer: Generally no, if you qualify for the federal exclusion. The Georgia booklet says “Georgia conforms to the Internal Revenue Code, as amended”, and Form 500 starts from federal adjusted gross income. Gain above the exclusion is taxed at a flat rate, which for 2026 the Department says “has been reduced from a flat rate of 5.19% to a flat rate of 4.99%” (HB 463). A nonresident selling a principal residence with no gain in federal adjusted gross income is exempt from the 3% sale withholding.
Georgia tax on home sale profit at a glance
| Item | What the documents say |
|---|---|
| Profit on your main home | Conforms to the Internal Revenue Code as amended; the booklet has no separate home-sale rule |
| Rate on gain above the exclusion | Flat 4.99% for taxable years beginning on or after January 1, 2026 (HB 463); 5.19% on the 2025 return |
| Collected at the sale | Nonresident sellers only: 3% of the total sales price withheld (Form G2-RP); exempt when the property is the seller’s principal residence and none of the gain is included in federal adjusted gross income (Form IT-AFF3). The deed also carries a real estate transfer tax, for which the seller is liable |
| Source | Georgia Department of Revenue |
What the Georgia documents say
The 2025 IT-511 booklet says “Georgia conforms to the Internal Revenue Code, as amended”, and the return begins with “Enter Federal adjusted gross income from Form 1040.” Under the federal statute, “Gross income shall not include gain from the sale or exchange” of a principal residence that meets the ownership and use tests, so an excluded gain never enters federal adjusted gross income. That is reasoning from two documents. The booklet prints no separate Georgia home-sale rule.
On the rate, the booklet says “Effective January 1, 2025, the income tax rate is 5.19%.” The Department’s 2026 Employer’s Withholding Tax Guide adds that under HB 463, retroactive to taxable years beginning on or after January 1, 2026, “The income tax rate has been reduced from a flat rate of 5.19% to a flat rate of 4.99%.”
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 Georgia sells their main home with a gain of $400,000 and meets the federal ownership and use tests. The gain is below the $500,000 joint exclusion, so it is not in federal adjusted gross income and, on the documents read, $0 is taxed by Georgia. As a second illustration, computed below, suppose the gain were $600,000. The amount above the exclusion would then be $100,000 and, computed as that excess times the 2026 rate of 4.99%, the tax at the flat rate would be $4,990 ($5,190 at the 2025 rate of 5.19%), before any other adjustment.
What is collected at the sale
Form G2-RP covers the sale of Georgia real property by a nonresident. It says the withholding “shall be 3% of the total sales price”, and the booklet adds that “Tax withheld is reported on Form G2-RP”. The Department’s Form IT-AFF3, the seller’s certificate of exemption, lists the exemption “The property being sold is the seller’s principal residence and none of the gain is required to be included in Federal adjusted gross income.” It also exempts a sale where “The purchase price of the property is less than $20,000.” The withholding applies to nonresident sellers, not Georgia residents.
Georgia also charges a real estate transfer tax on the deed. The Department’s transfer tax page says “The seller is liable for the real estate transfer tax, though frequently the parties agree in the sales contract that the buyer will pay the tax.” It prints the rate as “$1 for the first $1,000 or fractional part of $1,000 and at the rate of 10 cents for each additional $100 or fractional part of $100”.
What changes in 2026
Georgia: HB 463 lowers the flat income tax rate from 5.19% to 4.99% for taxable years beginning on or after January 1, 2026, and provides for further reductions of 0.125 percent a year from January 1, 2027 until the rate reaches 3.99 percent, subject to delays. Gain above the exclusion on a 2026 sale is taxed at 4.99%.
What the documents do not say
- The booklet does not mention a home sale, so the federal exclusion carries through the conformity statement and the federal starting point. The booklet prints the 2025 rate; the 2026 rate comes from HB 463 and the Department’s 2026 withholding guide. The Georgia statute was not archived.
Common mistakes
- Treating the 3% G2-RP withholding as a rule for Georgia residents; the form covers nonresident sellers.
- Using the 2025 rate of 5.19% for a 2026 sale; HB 463 sets 4.99% for 2026.
- Assuming a nonresident always has 3% withheld; a principal residence with no taxable gain is exempt.
- 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 Georgia taxes capital gains, Georgia retirement taxes, and home sale exclusion calculator.
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Answer againSources
- 2025 IT-511 Individual Income Tax Booklet: https://dor.georgia.gov/document/document/2025-it-511-individual-income-tax-booklet/download
- Form G2-RP Withholding on Sales or Transfer of Real Property by Nonresidents: https://dor.georgia.gov/document/document/g2rp-withholding-sales-or-transfers-real-property-non-residents/download
- Georgia Department of Revenue, Employer’s Withholding Tax Guide 2026 (revised June 2026): https://dor.georgia.gov/document/document/2026-employers-tax-guide-updated-june-2026/download
- Georgia Department of Revenue, Form IT-AFF3 Seller’s Certificate of Exemption: https://dor.georgia.gov/document/form/aff3/download
- Georgia HB 463 (2026), as passed House and Senate: https://gov.georgia.gov/document/2026-signed-legislation/hb-463/download
- 26 U.S.C. 121, Exclusion of gain from sale of principal residence (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapB-partIII-sec121.htm
- Real Estate Transfer Tax, Georgia Department of Revenue (read October 8, 2026): https://dor.georgia.gov/real-estate-transfer-tax
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.