There is a right time to sell your Los Angeles home and that is when you are ready. You may wonder if the Fall is not a good time to put your home on the market, or even winter. That might be a great time to list your home, as competition will be less since many sellers seem to think that the time to sell is in Spring.
Selling in an up market means that you will get more for your home, but you will also pay more for your new one. The same goes for the opposite market. You will be selling for less but paying less at the other end.
There will be tax implications when you sell. Are you the owner of the home or did you inherit it? Did you use it for work? Was it an income property? Did you make any improvements to it?
You will receive $250,000 capital gains tax relief as a single person or $500,000 as a couple. For assets acquired prior to December 31, 200, capital gains tax is 20% for those in higher tax brackets or 10% in the lower bracket. For property acquired after this date , and held for a minimum of five years, the rate drops to 18% and 8% respectively. To qualify for this exemption you will need to prove that you lived in the property for at least two of the five years prior to selling. The two years don’t need to be consecutive. However, if you are forced to relocate for work without having met the requirement you may still be allowed to received a proportionate tax break.
If you are selling an income property you will be able to do a 1031 Exchange where you move the proceeds of the same into a similar property – like for like.
If you are selling a property you inherited you will be required to pay both state and federal taxes on the gain. However, if you decide to use it as a second residence or move into it you may be able to receive the $250,000 or $500,000 deduction. You would want to consult with your tax professional to determine the best option.
If you are over 55 then you will qualify for the Senior Citizen’s Replacement Dwelling Benefit covered under California Propositions 60 and 90. This means that, after selling, if you purchase a home in L.A. County and a number other counties you will be able to transfer the base value of your old home to your new one. This could offer substantial savings. Once again you should talk to a tax professional.
Overall, if you feel it is time to sell, then don’t look for excuses not to. And keep in mind you will never know when you have reached to top of the market or, for that matter, the bottom.
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