Countries like Switzerland, Singapore, the Cayman Islands, Monaco, New Zealand, Belize and Hong Kong have no capital gains taxes. This makes these countries attractive to investors and entrepreneurs.
A few options to legally avoid paying capital gains tax on investment property include buying your property with a retirement account, converting the property from an investment property to a primary residence, utilizing tax harvesting, and using Section 1031 of the IRS code for deferring taxes.
The majority of states levy capital gains taxes – the only ones that don't are Alaska, Florida, New Hampshire, Nevada, Texas, South Dakota, Wyoming, and Washington. You may face additional capital gains tax consequences in these other states if you sell an investment or asset for a profit prior to moving.
Current tax law does not allow you to take a capital gains tax break based on your age. In the past, the IRS granted people over the age of 55 a tax exemption for home sales, though this exclusion was eliminated in 1997 in favor of the expanded exemption for all homeowners.
Capital gains tax rates
A capital gains rate of 0% applies if your taxable income is less than or equal to: $47,025 for single and married filing separately; $94,050 for married filing jointly and qualifying surviving spouse; and. $63,000 for head of household.
Starting in 2025, single filers can qualify for the 0% long-term capital gains rate with taxable income of $48,350 or less, and married couples filing jointly are eligible with $96,700 or less.
Billionaires avoid these taxes by taking out special ultra-low-interest loans available only to them and using their assets as collateral. This income works just like any other kind of income, allowing ultrawealthy to purchase homes, yachts, or even, Twitter.
While there is no state in the U.S. that doesn't have property taxes on real estate, some have much lower property tax rates than others. Here's how property taxes are calculated. The effective property tax rate is used to determine the places with the lowest and highest property taxes in the nation.
Use tax-advantaged accounts
Retirement accounts such as 401(k) plans, and individual retirement accounts offer tax-deferred investment. You don't pay income or capital gains taxes on assets while they remain in the account. However, you will pay income taxes when you withdraw money from the account.
If you have a large number of assets there might be a benefit to reside in one of the following states. These include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.
All states and the District of Columbia impose these taxes except Alaska, Delaware, Montana, New Hampshire and Oregon. The highest state sales taxes are in California (7.25%), Indiana, Mississippi, Rhode Island and Tennessee (7.0% in each).
For the 2025 tax year, individual filers won't pay any capital gains tax if their total taxable income is $48,350 or less. The rate jumps to 15 percent on capital gains, if their income is $48,351 to $533,400. Above that income level the rate climbs to 20 percent.
For the 2024 tax-filing season, the 0% rate on long-term capital gains – any asset held for longer than a year – can be applied to taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing jointly.
While the federal long-term capital gains tax applies to all states, there are eight states that do not assess a long-term capital gains tax. They are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.
Social Security and capital gains
Keep in mind that up to 85% of Social Security benefits can be subject to tax depending on your overall income, including capital gains. The calculation that determines how much of your Social Security benefits are taxable includes realized gains.
As of 2022, for a single filer aged 65 or older, if their total income is less than $40,000 (or $80,000 for couples), they don't owe any long-term capital gains tax.
Taxes aren't determined by age, so you will never age out of paying taxes. People who are 65 or older at the end of 2024 have to file a return for tax year 2024 (which is due in 2025) if their gross income is $16,550 or higher.
If it's your primary residence
You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years.
Summary. A number of states, including Texas, Alaska, and Florida, do not tax capital gains. California and New Jersey have the highest CGT, of 13.3% and 10.75% respectively. Unbiased can connect you to a financial advisor who can help you create a financial plan and reach your goals.
There are both benefits and drawbacks to living in states that don't impose a state income tax. You might save money. But that doesn't mean you will pay no taxes, and there are trade-offs to consider. Sometimes, states with no income taxes do not have the best public services.
Long-term capital gains can't push you into a higher tax bracket, but short-term capital gains can. Understanding how capital gains work could help you avoid unintended tax consequences. If you're seeing significant growth in your investments, you may want to consult a financial advisor.