Wisconsin taxes capital gains at 7.65%. Combined with federal taxes, your effective rate on a home sale could reach 26.5%.
WI State Rate
7.65%
Top rate; 30% deduction for long-term gains
Federal Rate
15%
Most common long-term bracket
Combined Effective
26.5%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Wisconsin 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 Wisconsin don't qualify for the exclusion. You'll owe 7.65% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Wisconsin, 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 Wisconsin and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 3.8% | $5,700 | Flat tax (2026) | |
| 4.25% | $6,375 | Flat tax rate | |
| 4.95% | $7,425 | Flat tax rate | |
WisconsinYou | 7.65% | $11,475 | Top rate; 30% deduction for long-term gains |
| 9.85% | $14,775 | Top marginal rate |
Selling in Iowa instead of Wisconsin would save $5,775 in state tax on a $150K gain.
Wisconsin taxes capital gains at rates up to 7.65%, but offers a notable 30% deduction on long-term capital gains, reducing the effective rate to approximately 5.36%.
This deduction makes Wisconsin more competitive than its headline rate suggests.
Milwaukee, Madison, and the Fox Valley are the primary markets. Madison's tech and university-driven market has seen strong appreciation.
Lake country (Door County, Lake Geneva) generates vacation property sales that can trigger significant gains.
Offering buyer concessions?
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