Two homes.
Which closes first?

Do I owe capital gains tax when I downsize in Colorado?

Often less than owners fear. Federal law excludes up to $250,000 of gain on a principal residence if you owned and lived in the home for at least 2 of the 5 years before the sale; a joint return can exclude $500,000 only if either spouse meets the ownership test, both spouses meet the 2-year use test, and neither used the exclusion in the prior 2 years. The gain is the sale price less selling costs, minus your adjusted basis (purchase price plus capital improvements, less any depreciation), so find the purchase closing statement and the improvement receipts. Your CPA confirms the number before the list price is set.

Do I lose my senior property tax exemption when I sell?

The exemption on the current house ends at closing. Since tax year 2025, an owner who qualified for it in 2020 or later may qualify for a reduced valuation on the next primary residence under a separate classification, so ask the assessor in the new county with your old exemption record in hand. If your taxes were deferred under the state program, that balance is paid at closing.

Should I buy the smaller place first or sell the house first?

Buying first means carrying two homes for a season and shopping without a sale contingency. Selling first means moving twice or arranging a rent-back, with the equity settled before you shop. The Denver metro median listing took 57 days to reach contract in August 2026, plus roughly 30 to 45 days to close on a financed sale, which is the window you budget for either way. Both orders are priced on your own numbers at /tools/move-up.

What does Robert do, and what goes to the CPA or attorney?

Robert prices the sale, the preparation, and the order of the two transactions, as a licensed Colorado broker under a written agreement. Your CPA confirms the gain, the exclusion, and the property tax consequences. A Colorado attorney answers questions about a trust, an estate, or who signs. Your lender sets the loan on the next home. There is no fee to talk.

The tax questions that belong before the list price.

A house held for decades usually carries a gain, and the first question is how much of it is yours to keep.

Federal law excludes up to $250,000 of gain on the sale of a principal residence (VERIFIED, 26 U.S.C. 121(a)) when you owned and used the home as your main residence for periods adding up to 2 years or more in the 5 years ending on the sale date and have not used the exclusion on another sale in the prior 2 years; the $500,000 figure on a joint return needs either spouse to meet the ownership test, both spouses to meet the 2-year use test, and neither to have used the exclusion in the prior 2 years (VERIFIED, 26 U.S.C. 121(b)(2)).

The gain is the amount realized (the sale price less selling costs) minus the adjusted basis (what you paid, plus capital improvements, less any depreciation taken), so the closing statement from the purchase and every improvement receipt are worth finding before anything else. Gain above the exclusion is your CPA's question, and the answer can change the list price, the timing, and whether a spouse's name on title matters.

The second question is the property tax position on both houses. Colorado's senior exemption takes 50 percent of the first $200,000 of actual value off the roll for an owner 65 or older who has owned and occupied the home for 10 consecutive years, and it ends when the property sells (VERIFIED, Boulder County Assessor, C.R.S. 39-3-203). For tax years beginning January 1, 2025, an owner who qualified in 2020 or later may qualify for a qualified-senior primary residence classification on the next home, valued on a reduced basis (VERIFIED, SB24-111, Colorado General Assembly).

If the taxes on the current house have been deferred under the state program, that loan, with its interest, is due when the home sells or transfers (VERIFIED, Colorado Property Tax Deferral Program, C.R.S. 39-3.5), so it belongs on the net sheet as a payoff.

Two houses, one order.

The choice most owners lose sleep over is whether to buy the smaller place first or sell the house first. Buy first and you carry two homes for a season, with the payment on the new one running while the old one is shown. Sell first and you move twice, or negotiate a rent-back, and you shop with a sale already closed and the equity in the bank.

The Denver metro median listing left the market in 57 days in August 2026 (VERIFIED, Realtor.com via FRED), and that figure runs to contract, not to closing; a financed buyer then needs roughly 30 to 45 more days to close. Read the total both ways: it is the carrying window to budget for if you buy first, and the lead time you have to find the next place if you sell first. Neither order is right for everyone, which is why both are priced on your own equity, payment, and timeline at /tools/move-up before a contract is written.

If the next place is a 55+ community, the rules are federal and local at once. A community qualifies as housing for older persons when at least 80 percent of its occupied units are occupied by at least one person 55 or older, it publishes and follows policies showing that intent, and it verifies occupants' ages under HUD's rules (VERIFIED, 42 U.S.C. 3607(b)(2)(C); 24 C.F.R. 100.307).

That leaves the community room to write its own rules about a younger spouse, a live-in caregiver, an adult child who needs a room for a year, or how long a guest may stay. Those rules, the HOA budget, and any pending assessment are read before the offer, not after. If you are weighing keeping the old house as a rental instead of selling it, the two paths are priced side by side at /tools/rent-vs-sell.

Forty years of contents, and who signs.

A long-held house needs a different preparation plan than a house sold every seven years. Deferred items, an old roof, a furnace past its expected life, a finished basement whose permit nobody can find, and a garage full of contents each get a decision: fix, disclose, or price. The preparation is priced against the list price at /tools/listing-prep, and the rule is to stop where the return stops. The contents are the part nobody budgets time for. Start there, weeks before photos, with the family, an estate sale company, or a hauler, because the house cannot be shown around forty years of things and the clearing takes longer than anyone expects.

Who signs is settled at the start. A house bought decades ago may sit in a trust, carry a deceased spouse's name, or have been retitled during estate planning, and each of those changes who signs the contract and the deed. Title confirms it before the listing agreement, and a Colorado attorney answers anything about the trust or the estate.

Since 2026-08-12 a Colorado broker needs a signed written listing agreement stating compensation and establishing either single agency or a transaction-broker relationship before licensed work (HB26-1426, amending C.R.S. 12-10-403(2)). Send the address, who is on title, and the year you bought, and the first thing back is a net sheet for the sale and both orders priced, with the tax questions listed for your CPA beside it.

What to gather before listing

• Closing statement from when you bought, and improvement receipts
• Current property tax bill, with any senior exemption or deferral noted
• Deed or trust documents showing who is on title
• Mortgage or line-of-credit payoff, if any
• The 55+ or HOA rules of the community you are considering

THE GAIN YOU MAY KEEP

Federal law excludes up to $250,000 of gain on the sale of a principal residence (VERIFIED, 26 U.S.C. 121(a)) when you owned and used the home as your main residence for periods adding up to 2 years or more in the 5 years ending on the sale date and have not used the exclusion on another sale in the prior 2 years; $500,000 on a joint return only when either spouse meets the ownership test, both spouses meet the 2-year use test, and neither has used the exclusion in the prior 2 years (VERIFIED, 26 U.S.C. 121(b)(2)). Gain above that line is your CPA's question, asked before the list price, not after closing.

THE SENIOR EXEMPTION ENDS AT CLOSING

Colorado's senior exemption takes 50 percent of the first $200,000 of actual value off the tax roll for an owner 65 or older who has owned and occupied the home as a primary residence for 10 consecutive years, and it ends when the property is sold (VERIFIED, Boulder County Assessor, C.R.S. 39-3-203). The next house starts without it unless the rule below applies.

IT CAN FOLLOW YOU, IN PART

For tax years beginning January 1, 2025, an owner who qualified for the senior exemption on a previous home in 2020 or later may qualify for a qualified-senior primary residence classification on the new one, which values the property on a reduced basis (VERIFIED, SB24-111, Colorado General Assembly). Ask the assessor in the new county, with the old exemption record in hand.

DEFERRED TAXES ARE PAID AT CLOSING

Colorado's deferral program for owners 65 and older pays the property taxes as a state loan secured by a lien on the home, with interest, and the balance becomes due when the home is sold or transferred (VERIFIED, Colorado Property Tax Deferral Program, C.R.S. 39-3.5). If you are in it, the payoff is a line on the net sheet, not a surprise on the settlement statement.

WHAT 55+ ACTUALLY MEANS

A community qualifies as housing for older persons when at least 80 percent of its occupied units are occupied by at least one person 55 or older, it publishes and follows policies showing that intent, and it verifies occupants' ages under HUD's rules (VERIFIED, 42 U.S.C. 3607(b)(2)(C); 24 C.F.R. 100.307). Whether a younger spouse, a caregiver, or an adult child may live there is decided by that community's own written rules. Read them before going under contract.

THE CLOCK YOU ARE PRICING AGAINST

The Denver metro median listing left the market in 57 days in August 2026 (VERIFIED, Realtor.com via FRED), and that clock stops at contract, not at closing. Add the contract-to-closing time, about 30 to 45 days on a financed purchase, to get the carrying window if you buy first, or the lead time for finding the next place if you sell first.

TWO ORDERS, PRICED ON YOUR OWN NUMBERS

Buy first and carry two homes for a season, or sell first and move twice. Neither is right for everyone. Run both at /tools/move-up with your equity, your payment, and your timeline, then read the net sheet at /tools/net-sheet for the sale itself; the gain, the exclusion and any deferral payoff are your CPA's lines, added beside it.

WHO SIGNS WHAT

Since 2026-08-12 a Colorado broker needs a signed written agreement stating compensation before licensed work (HB26-1426). If the house sits in a trust, or a spouse has died, title confirms who signs before the contract is drafted, not the week of closing.

Where Robert stops

Robert prices the sale, the order of the two transactions, and the preparation, as a licensed Colorado broker. The gain, the exclusion, and the property tax consequences are confirmed by your CPA; title, trust, and estate questions by a Colorado attorney; the loan on the next home by your lender.