Ohio taxes capital gains at 3.5%. Combined with federal taxes, your effective rate on a home sale could reach 22.3%.
OH State Rate
3.5%
Flat tax rate (2026)
Federal Rate
15%
Most common long-term bracket
Combined Effective
22.3%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Ohio 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 Ohio don't qualify for the exclusion. You'll owe 3.5% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Ohio, homes sold in October sell for 13% more than those sold in January (-17%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in Ohio and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 3.05% | $4,575 | Flat tax rate | |
| 3.07% | $4,605 | Flat tax rate | |
OhioYou | 3.5% | $5,250 | Flat tax rate (2026) |
| 4% | $6,000 | Flat tax rate | |
| 4.25% | $6,375 | Flat tax rate | |
| 5.12% | $7,680 | Top marginal rate |
Selling in Indiana instead of Ohio would save $675 in state tax on a $150K gain.
Ohio taxes capital gains at a flat 3.5% rate for 2026, making it one of the more affordable states in the Midwest for sellers.
Columbus, Cleveland, and Cincinnati drive the majority of market activity. Columbus has seen the strongest appreciation.
Ohio also imposes municipal income taxes in many cities (typically 1-2.5%), which may apply to capital gains depending on the municipality.
The state's affordable pricing means most primary residence gains fall within the federal exclusion.
Offering buyer concessions?
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