Texas has no state income tax, meaning you pay $0 in state capital gains tax. You still owe federal capital gains tax.
TX State Rate
0%
No state income tax
Federal Rate
15%
Most common long-term bracket
Combined Effective
18.8%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Texas is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in Texas don't qualify for the exclusion. You'll owe 0% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Texas, homes sold in May sell for 11% more than those sold in December (-12%). Timing your sale right can offset a significant portion of your tax bill.