Selling your Fremont home is about more than the price you get. The real win is what you keep after taxes and closing costs. With a few smart moves before you list, you can reduce taxable gain, avoid surprises at escrow, and walk away with stronger net proceeds. In this guide, you’ll learn the key rules, local costs, and timing strategies that matter in Fremont. Let’s dive in.
Know your tax category
Primary residence rules
If the property is your main home, you may qualify for the federal primary-residence exclusion. You can exclude up to $250,000 of gain if you file single or $500,000 if married filing jointly, when you meet the ownership and use tests. Review the requirements and worksheets in IRS Publication 523.
Investment or rental property
If the property is a rental, second home, or flip, your profit is generally a capital gain. Gains are long term if you held the property more than one year, and short term if one year or less. See the rate framework in IRS Topic 409, and review depreciation recapture rules in IRS Publication 544 if you claimed depreciation.
High-income sellers
If your income is above certain thresholds, you may also owe the 3.8 percent Net Investment Income Tax on investment-property gains. Learn more in IRS Topic 559.
Calculate taxable gain
Start with the core formula
Your gain equals the amount realized minus your adjusted basis. Amount realized is your sales price minus allowable selling costs. Adjusted basis is what you paid, plus capital improvements, minus depreciation and other adjustments. See definitions and worksheets in IRS Publication 523.
Costs that reduce your gain
Seller-paid costs typically reduce the amount realized:
- Real estate commissions.
- Title and escrow fees, recording or reconveyance fees, and an owner’s title policy if you pay it.
- Transfer or documentary taxes, prorated property taxes, HOA payoffs or assessments, and reasonable repair credits negotiated in escrow.
Keep detailed records of improvements like a new roof, remodels, or permitted ADUs. Routine repairs are usually not added to basis.
Use California rules wisely
State tax treatment
California taxes capital gains as ordinary income. Your state tax bill can be higher than you expect if you have a large gain and high income. Factor this into your net sheet early.
Nonresident withholding
If you are a nonresident selling California real estate, escrow often must withhold 3.33 percent of the sales price unless you qualify for an exemption or reduced withholding based on estimated gain. Start the process with FTB Form 593 well before closing.
FIRPTA for foreign sellers
If you are a foreign seller, separate federal withholding rules can apply in addition to California withholding. Coordinate early with escrow and your tax advisor to avoid delays.
Proposition 19 planning
If you are selling in connection with family transfers or estate planning, Proposition 19 changed how assessed values transfer between parents and children. Review current guidance and filing timelines with the Alameda County Assessor’s office using their Prop 19 resource.
Fremont closing costs to expect
Alameda County documentary transfer tax
For most Fremont sales, expect the county documentary transfer tax of approximately $1.10 per $1,000 of the sale price. Confirm current rates and who pays with escrow using the county’s guidance on real property recording and transfer tax.
City of Fremont status
Unlike some nearby cities, Fremont does not appear on lists of cities that add an extra municipal transfer tax. City ordinances can change, so confirm your parcel’s status with escrow or check current city listings such as this reference of transfer tax rates.
Other local items
Some properties carry special assessments or district charges that escrow will prorate and itemize. Your title report and tax bills will show any such items. If applicable, you can review examples of local special taxes on the city’s site and discuss details with escrow.
Plan to keep more
Maximize the §121 exclusion
If you can meet the two-out-of-five-year tests, the primary-residence exclusion often delivers the biggest tax savings. Confirm eligibility using the worksheets in IRS Publication 523.
Document capital improvements
Keep permits and invoices for permanent upgrades to increase basis and reduce taxable gain. Pub. 523 explains what qualifies versus routine repairs.
Map the timing
- For investment property, holding more than one year can qualify you for long-term capital gain rates.
- For prior rentals, calculate depreciation recapture using IRS Publication 544 and plan cash needs.
Reduce or avoid withholding
If you are a nonresident, apply early for an exemption or reduced amount with FTB Form 593 so escrow withholds only what is required.
Consider a 1031 exchange for rentals
Investment property may qualify for a like-kind exchange that defers federal and California gain if you follow strict deadlines and use a qualified intermediary. Review the basics and timelines in this overview of 1031 exchange rules, then consult your CPA.
Reporting and timing essentials
- Form 1099-S: Escrow often reports gross proceeds to the IRS, so expect to see a Form 1099-S. Coordinate with your tax preparer even if your gain is excluded. See the IRS 1099-S instructions.
- Installment sales: If you receive payments after closing, special rules apply and may interact with the §121 exclusion and depreciation recapture.
- High-income planning: Assess potential exposure to the 3.8 percent NIIT using IRS Topic 559.
Market context in Fremont
Fremont remains a high-value Bay Area market, with median prices commonly around or above seven figures depending on neighborhood and month. Review current city-level snapshots before you model proceeds using local market intel like this Fremont overview. Since many seller costs scale with price, even small improvements in sale price and fee negotiation can have an outsized effect on your net.
A strategic plan, tight documentation, and local expertise can meaningfully boost what you keep from your sale. If you want a private, Fremont-specific net sheet and a clear plan to time your sale, negotiate fees, and prepare documentation that supports your tax position, reach out to Joe Sabeh for a confidential consult.
FAQs
What is the primary-residence exclusion for a Fremont home sale?
- If you meet IRS ownership and use tests, you can exclude up to $250,000 of gain if single or $500,000 if married filing jointly; see IRS Publication 523.
How are Alameda County transfer taxes calculated in Fremont?
- The county documentary transfer tax is about $1.10 per $1,000 of price, typically paid by the seller unless negotiated otherwise; confirm with escrow using the county’s transfer tax guidance.
Does the City of Fremont add its own transfer tax?
- Fremont does not appear on common lists of cities with extra municipal transfer taxes, but always confirm current status with escrow or see references like this transfer tax list.
I previously rented my Fremont home. How does that affect taxes?
- You must account for depreciation recapture on prior rental use and apply the §121 rules correctly; see IRS Publication 544 and Publication 523.
Will California withhold taxes if I live out of state?
- Nonresident sellers are generally subject to withholding, often 3.33 percent of the sales price unless you qualify for an exemption or reduced withholding using FTB Form 593.
Can I defer tax by doing a 1031 exchange after selling a Fremont rental?
- Possibly, if the property is investment-use and you meet strict timelines and rules with a qualified intermediary; see this overview of 1031 exchanges.
