Grand Junction · IRMAA and the house

Will Selling My House Raise My Medicare Premiums in 2026?

It can, and the people it catches are rarely the ones who expect it. A Grand Junction house bought in the 1990s has roughly quadrupled on the federal price index, so a couple selling to downsize can sit on a gain that looks alarming and owe Medicare nothing, while a widow selling the same house three years after her husband's death can owe more than $6,000 in surcharges for one year. Here is the rule that decides which one you are, the two-year delay, the 2026 tiers, and the one timing choice that matters most.

Medicare On Main Data Desk

Published October 9, 2026 · 9 min read · Reviewed by Brian Penner, 22+ years in Medicare

What Medicare actually looks at

The income-related monthly adjustment amount, IRMAA, is a surcharge on Part B and Part D for people whose modified adjusted gross income is above a line. 42 U.S.C. § 1395r(i)(4) defines that income as your adjusted gross income plus tax-exempt interest; 20 CFR § 418.1010 spells out the same list. So the question "does selling my house raise my Medicare premiums" is really "does the sale change the adjusted gross income on my Form 1040." The proceeds do not. Getting your own money back out of a house is not income. What can change AGI is the gain, and only the part of the gain the tax code does not exclude.

That exclusion is the whole story for most Mesa County homeowners. Topic 701 puts it plainly: "If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse." The tests are ownership and use: "If you or your spouse owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of the sale, you meet the ownership test," and you must have "used it as a residence for at least 24 months (2 years) of the previous 5 years." You also cannot have used the exclusion on another home in the two years before this sale. Gain you exclude never appears in adjusted gross income, which means it never appears in the number Social Security pulls from the IRS, which means it cannot touch your premium.

What counts and what does not

Sources: IRS Topic 701; IRS Publication 523; 20 CFR § 418.1010. The broader list of what lands in IRMAA's income, including stock sales and mutual-fund distributions, is in do capital gains count toward IRMAA?

Why a 1990s Grand Junction house is the one to check

The exclusion was set at $250,000 and $500,000 in 1997 and has never been indexed, and Grand Junction prices have done what the rest of the West did. The Federal Housing Finance Agency's all-transactions house price index for the Grand Junction metropolitan area reads 100.00 in the first quarter of 1995 and 485.09 in the second quarter of 2026. A house that tracked the index is worth about 4.85 times its early-1995 price today, and about 72% more than in early 2020 alone (the index was 281.83 then). Nobody's house tracks an index exactly, and the Redlands, Fruita and Orchard Mesa have each moved differently; the point is the order of magnitude. A couple who paid $120,000 in 1995 and never thought of the house as an investment can now be looking at a gain that is a large fraction of the $500,000 line, and a single owner at a gain well past $250,000.

Before you panic at the sale price, do the Publication 523 arithmetic, because the gain is smaller than the price suggests. Selling price minus selling expenses gives the amount realized. Then subtract your adjusted basis, which is what you paid plus everything you have put into the house that "add[s] to the value of your home, prolong[s] its useful life, or adapt[s] it to new uses." The IRS's own examples include an addition, a new roof, a furnace, central air, a kitchen remodel, landscaping, a fence and a driveway. Repairs do not count, but thirty years of improvements in a Grand Junction house add up, and every dollar of basis you can document is a dollar of gain you do not have.

The worked example: one house, two very different Medicare bills

These are assumptions, not a client. A Mesa County couple bought their house in early 1995 for $120,000. On the FHFA index it would be worth about $582,000 in mid-2026; call the sale $580,000. Commissions and closing costs run $34,800, and over the years they put $35,000 of documented improvements into it.

The couple. Their $390,200 gain is entirely inside the $500,000 exclusion. It is reported on Schedule D if they receive a Form 1099-S, as Topic 701 requires, and then excluded. Adjusted gross income is unchanged, modified adjusted gross income is unchanged, and their 2028 Part B premium is whatever it would have been anyway. For a couple with ordinary retirement income the answer to the question in the title is simply no.

The surviving spouse. Now suppose one of them died in 2023 and the other sells the same house in 2026, more than two years later. The exclusion is $250,000, so $140,200 of the gain is a long-term capital gain on the 2026 return. Add it to $85,000 of pension, Social Security and interest income and modified adjusted gross income is $225,200. On the 2026 single-filer table that is the fifth tier, $446.30 a month on Part B and $83.30 on Part D, or $529.60 a month and $6,355.20 for 2028, on top of the standard premium. The same year's return also picks up the 3.8% net investment income tax that Topic 559 applies to the lesser of net investment income or the excess over $200,000 for a single filer: $957.60 here. We use the 2026 tiers as the yardstick because the 2028 tiers do not exist yet; the real lines will be a little higher, and the real surcharge a little larger, since the dollar amounts rise with the Part B premium each year.

The widow's problem is two things at once. Her exclusion halved, and her IRMAA lines halved, because the single-filer thresholds are exactly half the joint ones. That is the mechanism behind the widow penalty we wrote about, applied to a house. And Publication 523 hands her the fix, if she reads it in time: a surviving spouse "may be able to increase your exclusion amount from $250,000 to $500,000" if "you sell your home within 2 years of the death of your spouse," has not remarried at the time of the sale, and meets the ownership and residence tests counting the late spouse's time. Sold inside that window, her taxable gain is $0 and the surcharge is $0. Sold in year three, it is $6,355.20. Nothing about the house changed. The calendar did.

The 2026 tiers, and how much gain it takes to cross one

For 2026 the surcharge is set from your 2024 return, per the CMS fact sheet of November 14, 2025. Each tier is a cliff: one dollar over a line and the full tier applies for the whole year, per person.

Source: CMS, 2026 Medicare Parts A & B premiums and deductibles; standard Part B premium $202.90. The first 2027 line is $111,000 single / $222,000 joint, per the Medicare & You 2027 handbook; the rest of the 2027 table and all of the 2028 table are not yet published. See the 2027 IRMAA brackets for what is known.

Here is the same table turned around for a couple filing jointly with $150,000 of other income, which is a common Mesa County retirement picture of two Social Security checks, a pension and some withdrawals. The middle column is the taxable gain, after the $500,000 exclusion, that would push them over each line:

Read the first row carefully. For that couple, the house has to produce more than $500,000 of gain plus about $68,001 on top before Medicare notices at all, which in Grand Junction means a sale well north of $700,000 on a house bought in the 1990s with a modest basis. Most couples are not there. Most single sellers of a long-held house are closer than they think, because their first row is $250,000 of exclusion plus the distance from their income to $109,000.

Why the bill is two years late, and why it leaves on its own

20 CFR § 418.1135 says Social Security will "use your modified adjusted gross income provided by IRS for the tax year 2 years prior to the effective year" of the surcharge. A house sold in 2026 goes on the return you file in the spring of 2027; the IRS passes that figure to Social Security in the fall of 2027; the surcharge appears on your 2028 premiums, with a letter from Social Security in November or December of 2027 explaining it. In 2029 the look-back moves to your 2027 return. If that year was ordinary, the surcharge is gone, no form required. Two things follow. First, the money is not due at closing, so a seller who knows it is coming can set it aside from the proceeds. Second, the year the surcharge lands is a year you may be able to shape: a large Roth conversion or a big IRA withdrawal in the same year as the sale stacks on top of the gain, while spreading those moves into the surrounding years keeps each year's income under a line. We covered that interplay in Roth conversions and IRMAA and do RMDs count toward IRMAA?

Can you appeal it? Usually not

Form SSA-44 lets you ask Social Security to use a more recent year's income, but only after a major life-changing event, and 20 CFR § 418.1205 lists exactly seven: your spouse dies; you marry; your marriage ends; you or your spouse stop working or reduce hours; you or your spouse lose income-producing property "provided the loss is not at the direction of you or your spouse"; you lose pension income; or you receive an employer settlement payment. Selling your home because you wanted a smaller one, or to move closer to the grandchildren, is a decision, not an event, and § 418.1210 is explicit that Social Security "will not consider events other than those described in § 418.1205." The one honest exception: if a listed event also happened, such as the death of the spouse that prompted the sale, or retiring the same year, you can file on that event and ask for the more recent year, which may be lower once the gain is behind you. We walked through the form in can I appeal my IRMAA after I retire?

Six things to do before you list

1. Rebuild your basis. Closing statement from the purchase, every improvement receipt you can find, and the Publication 523 list of what counts. Basis is the only lever that shrinks the gain itself.
2. Run the worksheet before you accept an offer, not after. Selling price, less costs, less basis, less the exclusion you actually qualify for. If the result is zero, you can stop reading.
3. If you are widowed, check the two-year date first. The $500,000 exclusion survives only for a sale within two years of the death, and the single-filer IRMAA lines are half the joint ones. This is the single most expensive thing to get wrong on this page.
4. Pick the year on purpose. A taxable gain is going to land in one tax year; keep that year free of Roth conversions, large IRA withdrawals and other elective income, and let the first required minimum distribution's April 1 deferral work for you rather than against you.
5. Set aside the surcharge from the proceeds if there will be one. It is one year, it is per person, and the Part D piece is billed separately by Medicare even if your drug plan premium is $0.
6. Keep the second-home and rental math separate. No exclusion, depreciation recapture, and a 1031 exchange only for investment property; that is a tax-advisor question. (About 26.6% of Mesa County adults live with high blood pressure, per CDC PLACES; a year of higher premiums is money most of us would rather keep for the care itself.)

How we know all this: the Medicare On Main Data Desk frames every article with public data — here, IRS Topic no. 701 and Publication 523 for the exclusion, the ownership and use tests, the gain worksheet, basis adjustments and the surviving-spouse rule; 42 U.S.C. § 1395r(i)(4) and 20 CFR §§ 418.1010, 418.1135, 418.1205 and 418.1210 as published on Cornell LII for the definition of modified adjusted gross income, the two-year look-back and the life-changing-event rules; the CMS fact sheet of November 14, 2025 for the 2026 IRMAA tiers; the Medicare & You 2027 handbook for the first 2027 line; IRS Topic no. 559 for the net investment income tax; the FHFA all-transactions house price index for the Grand Junction metropolitan area; and CDC PLACES for county health prevalence. The worked example uses stated assumptions and 2026 tiers as a yardstick for a premium year whose tiers are not yet published. Medicare On Main is a licensed independent insurance agency. We do not offer every plan available in your area. Any information we provide is limited to the plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Not connected with or endorsed by the U.S. government or the federal Medicare program. This is education, not tax or legal advice; confirm your own numbers with a tax professional before you sell.