20 Sep What happens to taxes when I switch my permanent residence?

Q. I have a vacation home that I want to move to permanently and sell my primary residence. What changes taxwise do I need to know about so I don’t make a mistake?
— Moving soon

A. This sounds like an exciting change.

And it’s one you don’t want to mess up.

The key matter to focus on is not missing out on the exclusion of gain on sale of principal residence, said Neil Becourtney, a certified public accountant and tax director with Smolin, Lupin & Co. in Red Bank.

The exclusion is $250,000 for single taxpayers and $500,000 for those who are married and file a joint tax return, he said.

The home that you sell must have been owned and used as the principal residence for at least two of the preceding three years to get the exclusion, Becourtney said.

“This effectively gives someone in your situation three years to sell their primary residence, assuming you have owned and used it for at least the past two years.

In calculating the gain, remember to include in the cost all capital improvements made in past years, he said. Closing costs incurred as the seller including realtor commissions, attorney fees, transfer taxes, and other costs also reduce the gain.

“If your vacation home is located in a different state, i.e. Florida, and you move from New Jersey prior to the sale, you will want to change your address with all third parties as of the move, to document your change of residence – driver’s licenses, vehicle registrations, voter registrations, address on file for bank accounts, brokerage accounts, credit cards, etc.,” he said, noting you should also have new checks printed with the new address.

Good luck with the move!

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This story was originally published in September 2026. 

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