How Ohio treats a home sale: it follows your federal return
Ohio doesn’t have its own home sale rules. R.C. 5747.01(A) defines Ohio adjusted gross income as “federal adjusted gross income, as defined and used in the Internal Revenue Code, adjusted as provided in this section.” Gain you exclude under the federal home sale rules never enters federal adjusted gross income, so it is not in Ohio’s starting number either.
So the answer to “do I owe Ohio tax?” comes from the federal answer:
| Federal result | Ohio result |
|---|---|
| All gain excluded under section 121 | Nothing to tax in Ohio |
| Part of the gain is taxable | That part is in Ohio income |
| Sale was a rental or second home | The gain is in Ohio income |
| Sale produced a loss on your main home | No deduction federally, so none in Ohio |
Work out the federal side first. Our guide to capital gains tax on a home sale explains the $250,000 and $500,000 exclusion and the 2-of-5-year tests.
When the federal exclusion covers you
For most Ohio homeowners selling a main home they’ve lived in for years, the exclusion covers the whole gain. IRS Publication 523 lets a single filer exclude up to $250,000 and a married couple filing jointly up to $500,000, if they owned and lived in the home for at least 24 months of the 5 years before the sale.
Ohio home values make that limit easy to stay under for many sellers. Census estimates for 2020-2024 put the median home value (owner estimate) at $122,000 in Akron and $97,800 in Canton, so the full price of a typical house in those cities is below the single-filer exclusion.
When the gain is fully excluded, you may still have to report the sale federally if you received Form 1099-S, but it adds nothing to your Ohio income.
When an Ohio house sale is taxable
Ohio picks up the gain whenever it is in your federal adjusted gross income. The common cases:
- Rental property, including the rented side of a duplex. Depreciation recapture and the rest of the gain flow into federal and Ohio income.
- A second home or cabin that was never your main home.
- A house you flipped, which may also be business income.
- Gain above the exclusion, for long-time owners of high-value homes.
- A home you didn’t live in for 2 of the last 5 years, unless a partial exclusion applies.
- An inherited house that rose in value between the date of death and the sale.
Rental owners who want to defer the gain can look at a 1031 exchange, which defers it federally, and therefore in Ohio as well.
Ohio’s income tax rate
The rate table is in R.C. 5747.02. For individuals, nonbusiness income above $26,050 is taxed as follows:
| Tax year | Income from $26,050 to $100,000 | Income over $100,000 |
|---|---|---|
| 2024 | $360.69 plus 2.75% over $26,050 | $2,394.32 plus 3.5% over $100,000 |
| 2025 | $342.00 plus 2.75% over $26,050 | $2,394.32 plus 3.125% over $100,000 |
| 2026 and after | $332.00 plus 2.75% over $26,050 | no higher bracket; 2.75% continues |
From 2026, the statute sets a single rate of 2.75% above $26,050. The tax commissioner can adjust the income amounts in the table each year, so check the Ohio Department of Taxation’s published brackets when you file.
Example. A landlord in Barberton sells a rental in 2026 with $40,000 of federally taxable gain. If that gain sits entirely in the 2.75% bracket, it adds about $1,100 of Ohio income tax ($40,000 times 2.75%), before credits.
Selling Ohio property after you’ve moved away
Nonresidents can owe Ohio tax on an Ohio house. R.C. 5747.20(B)(2)(a) says “capital gains or losses from the sale or other transfer of real property are allocable to this state if the property is located physically in this state.” That applies whether or not you still live here.
If the gain is fully excluded under section 121, there is nothing to allocate. If it’s taxable, you may need to file an Ohio nonresident return, and your home state may also tax it and allow a credit for the Ohio tax. A tax preparer can sort out which state taxes what. Selling from a distance has its own logistics, covered in selling a house from out of state.
Records to keep for your Ohio return
Because Ohio follows your federal numbers, the records are the same for both returns: your purchase settlement statement, receipts for capital improvements, the sale settlement statement, any Form 1099-S, and depreciation records if the property was ever rented. Keep them with the federal return that reports the sale.
Ohio taxes that aren’t income taxes
Two Ohio charges at closing look like taxes on the sale but aren’t income tax:
- The conveyance fee, a county transfer tax the seller pays when the deed is recorded. In Summit, Stark and Portage it’s $4 per $1,000; in Medina it’s $3 per $1,000. See the Ohio conveyance fee guide.
- Prorated property taxes, which are a settlement of real estate taxes between you and the buyer, not a tax on the sale.
Federally, the conveyance fee counts as a selling expense that lowers your gain, and that lower gain carries into Ohio.
Tax rules depend on your full return, so confirm your numbers with a tax professional before filing.
