With property values rising and mortgage interest rates falling the last few years you might think about selling your current home and buying another with the profits… or maybe you find you just don’t like your new home and are ready to make a move.
Sounds like a good plan, but be careful you don’t move too quickly.
If you haven’t lived in your current home for at least two years you may have to pay capital gains tax.
But thanks to the Taxpayer Relief Act of 1997, if you have lived in and owned your house at least two of the last five years, you can exclude up to $250,000 if you are single and $500,000 if you are married in capital gains from the sale of your primary residence. This exclusion is available to taxpayers for one sale every two years.
This is a major break for most homeowners… it protects what is often our most valuable asset from a big chunk in taxes!
Everyone’s situation is unique. Be sure to consult your tax or financial advisor to determine how selling your home might affect your finances.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
