It is one of life’s necessary evils: in most situations, when a profit is made the government has the ability to place a tax on it. This rule also applies to home sales. However, I would like to let my clients in on a little secret. If you sell your home, you may NOT have to pay taxes after all! Keep these ten facts in mind if you plan to sell your home this year. They may save you some money!

1.Is this Your First Time Buying a Home? You May get a Credit:

With all the recent talk of millennials now becoming first-time homebuyers, I found this point especially interesting. If you claimed the first-time homebuyer credit when you bought your home, different rules may apply to the sale. Click here for more information.

2.Home Sold at a Loss:

If your home is sold at a loss that loss can’t be deducted on your tax return.

3.Exclusion of Gain:

This one is a biggie. If you meet certain eligibility tests, you may be able to exclude part or all of the gain from the sale of your home. Some of these criteria include your use and ownership of the home. For example, you must have owned and used the property as your main home for at least two out of the five years before home was officially sold.

4.Look Out for Exceptions:

Exceptions may apply in regards to ownership, use, and other rules. Such exceptions include those with a disability, certain members of the military, and certain government and Peace Corps workers. Refer to this page for more information.

5.Sale May Not Need to be Reported

Gains that are not taxable do not need to be reported to the IRS on your tax return.

6.But if You MUST Report the Sale…

You must report the sale on your tax return if all or part of the gain can’t be excluded. Additionally, the sale must be reported if you choose to not claim the exclusion or if you get Form 1099-S, Proceeds From Real Estate Transactions. Get more information from the IRS by clicking here.

7.Exclusion Limit:

The most gain that can be excluded from tax is $250,000, with the limit being $500,000 for joint returns. The Net Investment Income Tax does not apply to excluded gain.

8.Exclusion Frequency Limit:

Typically, gains from the sale of your main home may be excluded only once every two years. Some exceptions may apply.

9.Is it Your Main Home?

Only a main home qualifies for any potential exclusions of gain. If you own more than one home, your main home would be considered the one where you spend the most time.

10.Make Sure to Report Your Address Change

Once you have moved into your new home, you must update the address with the IRS using this form. Also remember to update your new address with the Health Insurance Marketplace if this is where you purchased your current health insurance plan.

Hopefully this has served as a helpful guide in your home sale journey! For any real estate inquiries, make sure to contact me today!

Interesting fact: According to the National Taxpayers Union, between 30-60% of taxable property in the U.S. is over-assessed. Even more alarming, it’s usually the middle income taxpayers’ properties that are most often over-assessed, yet fewer than 5% challenge the assessment.

I strive to provide homeowners and future homeowners with useful information that will benefit them in their everyday lives. In this blog, I outline the steps needed to file a property tax appeal and ultimately win. Use this knowledge to keep both your mind and wallet happy!

Step 1: Be Informed! Familiarize Yourself with the Appeal Process in Your State

This sets the foundation for how the rest of the process will flow. Every state has different deadlines, procedures, and protocol when filing an appeal, so it is important to gather as much information as possible before you embark on this journey.

Step 2: Weigh the Costs

As with most things in life, filing a property tax appeal is not free. Homeowners can expect to pay anywhere from $300 to $750 for an appeal based on a variety of factors, such as complexity of the project, the market, and the appraiser’s experience level. Additionally, if the appeal goes to the superior court, expect to pay a couple hundred dollars more.

Step 3: Keep EVERYTHING

Keep all assessment records and do your homework. Compare the records to your purchase price and comparable properties that have recently sold. Find out if your county has an online program where you can see the assessments on all of the properties in the county.

Step 4: Comply with All State Laws, Deadlines, and Procedures

To stay one step ahead of the game, make sure you contact local taxing authorities in advance of the deadline for appeals and be prepared to present all necessary documentation. Remember that the time frame to appeal is brief, anywhere from 15 to 45 days from the assessment date. Also, chances are you will only get 1 shot per year to file your property tax appeal, so make sure you’re ready!

Step 5: Work Outside the System

Homeowners can improve their chances of appealing their property tax assessment by hiring a certified independent appraiser. Having a third-party expert provide a credible, reliable opinion of the home’s value can help when it’s time to present the appraisal report to the local assessor. And since the end goal is to win, every tool in your arsenal helps!

Looking into South Florida real estate? Then contact Bozena Kaluza for all of the information you need!

As we observe the incredible destruction of Hurricane Harvey, one thing becomes remarkably apparent: homeowners insurance and condo insurance are an incredibly important factors not to be overlooked. Whether you live in a high-rise condo or a single family home in a gated community, homeowners/condo insurance is one of the best ways to protect one of the biggest investments of your life. In this blog, I would like to discuss the key reasons homeowners insurance can be of great value:

Unexpected Damage can be More Expensive than you Think:

As I stated previously, hurricane season makes homeowners insurance a necessity in South Florida. It’s not uncommon to have broken windows, ripped screens, missing roof shingles, and even more costly home fixes after an intense storm. Homeowners insurance prevents you from being forced to pay for such repairs out-of-pocket. Along those lines, those that own condos should also invest in condo insurance (the condo equivalent of homeowners insurance). It is a common misconception that an HOA will cover condo repairs, however this is not true. While the condo owner is not considered responsible for the outside land, condo building structure, and common building areas, they are solely responsible for the interior of the condo space and all repairs. And just as with homeowners, sometimes the damage to a condo can be of no fault of the actual owner. For example, if a neighbor’s hot water heater were to burst, it could potentially cause flooding and mold damage to individual units down multiple floors! As you can see, the monthly deductible of homeowners/condo insurance is much more affordable than fixing major home repairs, which can easily cost thousands of dollars. Wouldn’t you prefer only having to file a claim in an already stressful situation than also worrying about the financial burden?

It Might be Required: For homeowners who pay a mortgage, it should come as no surprise that some lenders require buyers to invest in homeowners insurance to ensure that their financial investment is adequately protected should the unthinkable happen. In fact, if their client does NOT have homeowners insurance, the lenders is allowed to buy it themselves and charge you for the cost, according to the Consumer Financial Protection Bureau. Take that power back into your own hands, and pick a homeowners policy within your budget and with the coverage of your choosing.

It can Offer Protection Beyond Your Home: For the most part, homeowners/condo insurance typically extends to more than just damage to your physical property. Take a look at the additional protection a homeowner’s policy can provide:

Home and Attached Structures: Homeowners insurance will often cover the home and anything attached, such as a deck or garage.

Other Structures: You can choose a policy that will also pay for repairs to detached structures on your property, such as a fence or shed.

Personal Property: Coverage can include the price to replace certain belongings such as furniture or electronics should they be damaged or even stolen.

You and Your Family: Should you or a family member accidentally damage someone else’s property, homeowners insurance can potentially pay for related repair costs, legal fees, and medical bills.

Guests: If a guest is accidentally injured in your home, your policy may help pay for resulting medical bills.

Additional Living Expenses: If you must leave your home after a covered risk, homeowners/condo insurance may pay for temporary living costs such as hotel bills.

As you can see, homeowners and condo insurance is extremely important. Make the responsible choice, and make sure you, your home, and your family are protected!

For any real estate inquiries, please contact Bozena Kaluza at 305-801-8363!