By definition, capital gains tax on home sale is the levy imposed on the profit one makes from selling a residential property. For example, if you buy a house for USD 200,000 and sell it for USD 250,000, the USD 50,000 gain is subject to capital gains tax.
This tax is important because it affects not just homeowners, but also the market. Benefits include revenue for the government and discouraging speculative purchases. Historically, capital gains tax on home sale was introduced in the US in 1913 as part of the income tax system.