Louisiana taxes capital gains at 4.25%. Combined with federal taxes, your effective rate on a home sale could reach 23.1%.
LA State Rate
4.25%
Top marginal rate (2026)
Federal Rate
15%
Most common long-term bracket
Combined Effective
23.1%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Louisiana 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 Louisiana don't qualify for the exclusion. You'll owe 4.25% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Louisiana, 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 Louisiana and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
Texas0% | 0% | $0 | No state income tax |
LouisianaYou | 4.25% | $6,375 | Top marginal rate (2026) |
| 4.4% | $6,600 | Top marginal rate | |
| 4.7% | $7,050 | Flat tax (2026) |
Selling in Texas instead of Louisiana would save $6,375 in state tax on a $150K gain.
Louisiana taxes capital gains as ordinary income with a top marginal rate of 4.25% for 2026. The state recently reformed its tax code, flattening rates.
New Orleans, Baton Rouge, and the Northshore (Mandeville, Covington) drive most market activity. Hurricane risk can affect both property values and tax-deductible losses.
Louisiana's low median home price means most sellers have gains within the federal exclusion.
Investment property in tourist areas like the French Quarter can generate significant gains that face the full state and federal tax burden.
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