Even if you love where you live now and have no plans to move, there are a couple things to keep in mind to save you money down the road:
- Consider living in your home for at least 2 years in the past 5 years in order to qualify for the exclusion of gain. You can generally exclude $250k (single) or $500k (married) in capital gains / profit on your home, provided you’ve lived in your house for at least 2 of the past 5 years. This exclusion could save you upwards of $100k in taxes!
- Keep documentation of home improvements that you’ve done over the years. If you own your home long enough (or are lucky enough), you may make a big enough profit over and above the exclusions that you will end up owing capital gains tax. But having documentation of improvements through the years will help you reduce that tax. The IRs lists a lot of improvements that qualify, with the notable exception of painting (painting is considered maintenance, not an improvement).
The IRS lists the rules in their Publication 523, Selling Your Home: https://www.irs.gov/publications/p523ns/p523