The U.S. Charges One Of The Highest Capital Gains Taxes On Property Sales—Here’s How To Avoid Paying Them

Many countries have become investment havens because of their lack of capital gains taxes. The U.S. is not one of them.

By Jeff Vasishta January 30, 2017

Capital gains. Rarely have two quite innocent words placed next to one another invoked so much anger from so many people. For those thinking about selling a home, it’s worth getting acquainted with them—and fast. Capital gains are the taxes you pay to Uncle Sam when you sell a property. You may shudder to discover that America, with a capital gains tax burden of 28.6 percent, ranks near the top of countries in the Organization for Economic Cooperation and Development (OECD).

Michael A. Gillen, director of the Tax Accounting Group at law firm Duane Morris in Philadelphia, told Mansion Global, “Nine OECD countries fully exempt most capital gains income,” They include New Zealand, Switzerland, Czech Republic, Slovenia and Turkey.

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With Capital Gains seriously hemorrhaging sales profits of many US home, owners and investors, work assiduously to try and alleviate their costs. Tax exclusions allow a single seller $250,000 in profits tax free and $500,000 for married couples filing a joint return. The seller(s) must have owned and used the home as their principal residence for at least two of the five years before the sale. These exclusions apply only to primary homes.

For secondary homes or investment properties, there are other ways to avoid a stifling tax bills. All renovations and repairs can be offset against taxes. A lack of rent on mortgaged home is also considered a loss on a yearly filing. If an investor wishes to buy another property or properties equal or greater to the one they are selling, they can do a 1031 Exchange, which, according to Forbes, is a swap of one business or investment asset for another. Although most swaps are taxable as sales, if you come within 1031, you’ll either have no tax or limited tax due at the time of the exchange.

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For those whose blood curdles at the prospect of paying taxes to anyone when you sell your house, there are several expat countries with no capital gains taxes at all. And we don’t mean places with masked militia riding around motorbikes. Here are some of them.


Though it’s been in the news recently for the wrong reasons, it’s also been making headlines because of the amount of French citizens relocating across the boarder (actor Gerald Depardieu being amongst the most famous) to escape France’s sky high taxation. It’s earned income taxes generally aren’t low by any standards—but zero capital gains tax is a no-brainer.


If you want a complete change of lifestyle and climate. Malaysia, like its neighbor Singapore, has no capital gains. Also, Malaysia does not tax citizens if they earn their income from outside the country, even if, is some cases it is remitted back to Malaysia. Non-residents, though with be taxed 30 percent on properties purchased and sold within 5 years, a law designed to curb flipping from outsiders.

New Zealand

There’s a reason the New Zealand real estate market is on fire and this is one of them. No capital gains tax on the sale of equities or other investments. It does have a formal law stating that real estate purchased for the express purpose of resale can be made subject to capital gains taxes, however this is rarely enforced. The Labour Party proposed a fresh tax on capital gains several years ago and were promptly lost an election. There in lies a lesson.


Once known as British Honduras, this tropical ex-pat favorite has English as a national language and zero capital gains taxes for residents or non-residents alike. What’s not to like?

Hong Kong

A bastion for bankers and businessmen of all stripes, Hong Kong does not charge capital gains on property sales. Taxes on pay package payouts for employees may be subject to taxes but not unrestricted shares and options. Their policy is viewed as tradition of respect for capital, one worth holding on to.

Jeff Vasishta



Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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