What taxes do you pay when you sell a house in Minnesota?
Most Victoria sellers pay two taxes at closing, the Minnesota deed tax and their share of this year's property taxes, and many owe no income tax on the profit at all. Here's what sellers in Lakebridge, Watermark and the rest of Victoria ask Mitch & Meghan, part of the Scrimgeour Group with eXp Realty.
Do I pay capital gains tax when I sell my home?
Usually not on the home you live in. The IRS lets you exclude up to $250,000 of profit, or $500,000 if you're married filing jointly, when you've owned and lived in the home at least two of the last five years. Profit is roughly your sale price, less selling costs, minus what you paid and what you spent on improvements.
Does Minnesota tax the profit on a home sale?
Minnesota taxes only the profit the federal exclusion doesn't cover, and it taxes it as regular income. State rates run from 5.35% to 9.85% depending on your income. If investment income for the year tops $1 million, Minnesota adds a 1% tax on the amount over that. A Victoria home owned for decades deserves a call to your tax pro.
How much is the Minnesota deed tax for sellers?
The deed tax is 0.33% of the sale price, which works out to $3.30 per $1,000, and sellers usually pay it. On a $600,000 Victoria sale, that's $1,980. Victoria is in Carver County, so there's no extra county tax. Sellers in Hennepin County, which includes Minnetonka, Eden Prairie and Edina, pay another 0.01%.
Who pays property taxes the year I sell?
You and the buyer split this year's property taxes by the closing date. Carver County bills once a year, with the first half due May 15 and the second half due October 15 for most homes. The closing company credits whoever paid ahead, so your settlement statement depends on when you close.
Will I get a tax form after I sell my house?
You may get an IRS Form 1099-S from the closing company. If you do, the IRS says you have to report the sale on your return, even when all of your profit is excluded. If you can't exclude all of it, you report it either way. Bring your closing statement and improvement receipts to your tax pro.
How do I plan for taxes before I list my Victoria home?
Ask for a net sheet that shows your price, costs and mortgage payoff before you list. Seller closing costs in our area run about half a percent of the sale price, on top of the negotiated commission. For every line, see what it costs to sell in Victoria. Moving up or downsizing? Read selling and buying in Victoria.
Selling in Victoria, Chanhassen or Excelsior? Call or text Mitch & Meghan at (612) 720-5171, and Mitch will put your deed tax, your Carver County taxes and your payoff on one net sheet. This post is general information, not tax advice. For your own situation, talk with a tax professional or attorney.
Sources: IRS, Topic No. 701, Sale of Your Home (page updated October 12, 2026). Minnesota Department of Revenue, Deed Tax Rate (current rate, checked October 2026). Minnesota Department of Revenue, Net Investment Income Tax (tax years after 2023, checked October 2026). AARP, Minnesota State Tax Guide (2026 rates, updated March 19, 2026). Carver County, New Resident Information (property tax due dates, checked October 2026).
