{"id":229,"date":"2022-10-26T15:33:50","date_gmt":"2022-10-26T15:33:50","guid":{"rendered":"https:\/\/www.hrblock.com\/expat-tax-preparation\/resource-center\/?p=229"},"modified":"2025-08-20T14:23:22","modified_gmt":"2025-08-20T18:23:22","slug":"u-s-taxes-on-selling-property-abroad","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/expat-tax-preparation\/resource-center\/income\/real-estate\/u-s-taxes-on-selling-property-abroad\/","title":{"rendered":"U.S. Capital Gains Tax on Selling Property Abroad"},"content":{"rendered":"\n

Selling property abroad? Along with finding the right realtor and coordinating international logistics, there\u2019s another factor you should keep in mind: Your U.S. taxes.<\/p>\n\n\n\n

Taxes when selling real estate can be complicated even when that property is Stateside, and you probably have more than a few questions, like; “How much tax do I pay on the sale of property abroad?” “How do I report a sale of foreign property on my U.S. taxes?” “What taxes do you owe if the overseas property you sell was inherited?”<\/p>\n\n\n\n

File on my own<\/a><\/div>
File with an advisor<\/a><\/div><\/div>\n\n\n\n

Below we\u2019ve answered these questions and summarized the basics of what you should know about selling property abroad and U.S. taxes come tax time.<\/strong><\/p>\n\n\n\n

Sold an overseas property last year and ready to file? Get started on your expat taxes now<\/a>.<\/p>\n\n\n\n

U.S. capital gains tax on selling foreign property<\/h2>\n\n\n\n

When you sell property or real estate in the U.S. you need to report it and you may end up owing a capital gains tax<\/a>. The same is true if sell real estate overseas, and we don’t recommend trying to avoid a capital gains tax on foreign property.<\/strong> The U.S. is one of only a few countries that taxes you on worldwide income \u2014 and gains made from foreign property sales are considered foreign income<\/a>.<\/p>\n\n\n\n

That means it doesn\u2019t matter if the real estate you sold is in Austin, Texas or Auckland, New Zealand \u2014 you still have an obligation to report the gains you made on the sale. What\u2019s more, if the gains are not excluded, you\u2019ll pay a short-term or long-term capital gains tax on it. <\/p>\n\n\n\n

When selling property abroad, different kinds of residences and properties have different kinds of reporting requirements and tax specifications.<\/strong> For example, selling an overseas rental property<\/a> has different tax rules than when you sell an overseas primary residence.<\/p>\n\n\n\n

A word of warning \u2014 you may also owe taxes to the country in which the overseas property lies, but you may be able to avoid paying capital gains taxes<\/a> to both countries by claiming the\u00a0foreign tax credit<\/a>, which is a dollar-for-dollar credit on taxes paid to one of the countries. Get started with an Expat Tax Advisor now.<\/a><\/p>\n\n\n\n

U.S. taxes on sales of a primary foreign residence<\/h3>\n\n\n\n

A foreign residence\/property qualifies as your principal residence if you lived in and<\/em> owned it for at least 24 out of the last 60 months ending on the date of the property sale.<\/p>\n\n\n\n

The same taxes and tax benefits that apply to selling your home in the U.S. also apply to selling your primary residence in a foreign country.<\/strong> That means any gain from selling your primary residence overseas is usually tax-free, as long as you meet the occupancy requirements and your gain is below these thresholds:<\/p>\n\n\n\n