Georgia taxes capital gains at 5.39%. Combined with federal taxes, your effective rate on a home sale could reach 24.2%.
GA State Rate
5.39%
Flat tax rate (2026)
Federal Rate
15%
Most common long-term bracket
Combined Effective
24.2%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Georgia 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 Georgia don't qualify for the exclusion. You'll owe 5.39% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Georgia, homes sold in February sell for 6% more than those sold in October (-7%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in Georgia and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 0% | $0 | No state income tax | |
Florida0% | 0% | $0 | No state income tax |
| 4.5% | $6,750 | Flat tax rate (2026) | |
| 5% | $7,500 | Taxed as ordinary income | |
GeorgiaYou | 5.39% | $8,085 | Flat tax rate (2026) |
| 6.2% | $9,300 | Top rate; 44% deduction available |
Selling in Tennessee instead of Georgia would save $8,085 in state tax on a $150K gain.
Georgia transitioned to a flat 5.39% income tax rate for 2026, down from its previous graduated system. Capital gains are taxed as ordinary income at this flat rate. The simplification benefits taxpayers who previously fell into the top bracket, though the rate remains moderate by national standards.
The Atlanta metro area dominates Georgia's real estate market and has seen substantial appreciation, particularly in suburbs like Alpharetta, Marietta, and Johns Creek. Many sellers in these areas face gains that exceed the federal exclusion, making Georgia's 5.39% rate a significant consideration.
Georgia does not offer a separate reduced rate for capital gains or a deduction for long-term gains. All gains flow through at the flat 5.39% rate. Investment property sellers face the full rate on their entire gain without the benefit of the federal exclusion.
Georgia's relatively low cost of living and competitive tax rate have made it a destination for businesses and individuals relocating from higher-tax states, particularly from the Northeast. This inbound migration has supported property values and created consistent demand in the metro Atlanta market.
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