It depends. If you bought your home less than 2 years ago and made a profit on the sale of the home, then yes, you will have to pay Capitol Gains taxes. If you bought the home as a rental/investment property and never lived in it, you may have options. You can opt to participate in a 1031 exchange to divert taxes if you buy a “like” property or, you can sell outright and pay Capital Gains taxes on the net a profit.

If you bought your primary home sometime within the past 5 years and lived in the home as your primary residence for a at lease a 2-year period of time during the last 5-year period, then odds are you won’t have to pay Capitol Gains Taxes. The 2 years of living in the residence does not have to have been consecutive, it can be cumulative, as long as it was 2 years during the most recent 5-year timespan.

As an individual, you are allowed up to $250,000.00 in untaxed gains if you fall within the aforementioned category. If you are a married couple, and file taxes together, you are allowed up to $500,000.00 in untaxed gains if you meet the (2yr/5yr) criteria. However, if your profits exceed the limits, you will be responsible for Capital Gains taxes on the overage of limits allowed.

In brief, the best time to buy a property is when you’re ready to buy. Ready financially, prepared emotionally and motivated circumstantially. If you are buying a home for the long game, and you have saved the required down payment and can afford the subsequent monthly payments, variables such as current interest rate and fleeting market trends are less of a concern than for someone who plans to buy a property and sell it rapidly.

With the right purchase, your property will inevitably realize increased equity over time. Additionally, you will incur tax deductions that equal big IRS savings to you. If prepared, you will not regret making the decision to buy.

Generally, the alternative is to pay someone else’s monthly mortgage while they earn the equity with your rent payments.

The simple answer is, the time is now. As Southern California residents, we don’t have the same seasonal issues that other areas of the United States deal with. Sure, we have a little rain here and there, but we don’t have ice and snow and brutally cold temperatures like in other regions. Buying and selling season are essentially timeless in SoCal, with the possible exception of Thanksgiving and/or Christmas weeks, listing is an activity that can and does occur any time of the year. 

Yes! Now that interest rates are trending downward, buyers are showing up at open houses and according to recent statistics, prospective buyers are doubling down and pre qualifying for loans in droves once again. This equals “prime time” for sellers.

There are certain steps to consider in an effort to prepare your home for listing and garnering abundant buyer attention. I’ll address those necessary steps in a subsequent posting. Or, as always, please reach out to me at your convenience and we can discuss next steps for listing your property when we talk!

There sure are! It pays to be older, sometimes. ☺ If you are 55 or older, a CA resident and decide to sell your current home in CA and subsequently purchase a replacement home in CA, you will enjoy a property tax transfer benefit.

I will provide an example that should make it somewhat self-explanatory.

Let’s say you bought a home in 2003 for $360,000 and you are selling it today for $1,050,000.00 <<< These numbers are arbitrary and only selected for the sake of an example.

Let’s say you now purchase your new home (within the required 2 year time frame) and you purchase it for $800,000 or $900,000.00 or $1,000,000 or, or, or, or …

Your property tax rate will remain at the same property tax rate that you were paying for the primary home you purchased in 2003 for $360,000.

Each year a property “assessed value” is subject to change slightly, so the tax rate transfer is not as simple as saying you will pay taxes on the original $360,000.00 purchase price you had in 2003. That same $360,000 property may have a current “assessed value” (for tax collector purposes only) of perhaps, $550,000 due to annual incremental government assessed value increases over the years and/or property tax increases that occurred due to property tax reassessments imposed because of permitted construction/home improvements made to the property over the years. Notwithstanding construction/improvement based property tax reassessments, there is a maximum annual property tax increase that can be imposed each year.