Ready to off-load that military home you bought two duty stations ago?
Now may be the time to find out what your investment is worth.
Spring is almost here, and it could be the perfect time to sell your home! Limited inventory and an abundance of ready buyers make today’s real estate market a great opportunity for military home sellers.
For instance, if you’ve hung on to a property you bought a few years ago either as an investment or a home to return to in retirement, you may be wondering if now is a good time to consider putting a for sale in that yard. Data suggests that it is. Home sales jumped 6.7% in January despite record-low supply, and this trend looks to continue throughout the spring and summer months. Listed homes are also selling fast, with an average of only 19 days before going under contract.
Before you decide to sell, it’s important to consider financial implications, as well as your personal situation and who can help you guide you through the process.
Run The Numbers
If you are currently renting the property, are you making profit? Is being a landlord a headache? A real estate professional can help you understand the value of the home and compare that that to the rental income you are making. Again, with low inventory available throughout the country, military home sellers can capitalize by selling now.
Tax Implications
Before you put your home for sale, you should consider the potential tax implications.
Capital Gains
Did you know that your home is considered a capital asset, subject to capital gains tax? If your home has appreciated in value, you could be required to pay taxes on the profit. Yet, tax laws in past years state that active duty military members can pause the “clock” on capital gains tax. To qualify, a homeowner must receive Permanent Change of Station Orders and relocate more than 50 miles away. Keep in mind that tax laws do NOT permit you to do this on more than one property at a time. Ultimately, you cannot pause the clock on more than one house and should seek any tax advice from a tax professional.
Mortgage Interest
As a military homeowner, you can deduct from your taxes any amount of mortgage interest you have paid throughout the year. Limits are in place based on the amount of your mortgage debt.
Property Taxes
It seems almost ironic, but the local and state taxes you pay to own a property can be deducted from your annual income taxes. This deduction applies to any personal property, so it would include a main home, as well as a vacation home or land or property you own.
Closing Costs
There may also be some closing costs paid for a home sale or purchase that can be claimed as a tax deduction. There are certain stipulations about the type and amount of the loan, but this is definitely one to ask your agent or tax advisor about. No one wants to leave money on the table!
Ready to Sell?
Are you ready? If this selling season is like the last, things could move really quickly, which is sometimes difficult if you or your spouse is deployed or if you live far from the house you are selling. That’s where a real estate professional comes in – they can be on site, manage open houses and other showings, coordinate inspections, etc. Plus, when you connect with an agent who is experienced working with military and veteran families, they understand your unique challenges and considerations for making such a big decision.
When you are ready to get started our team at Realogy Military Rewards is ready to and is ready to help you with your home selling journey and will connect you with an expert real estate agent in your local market.
