How to Decide When to Sell
On the Move?
Housing needs change throughout our lives. At first, singles need a place of their own. Then younger families move to get more space for the kids. Later, first generation retirees may want less to take care of, and finally second generation retirees may need more support and services.
Many seniors staying in their old homes and are perfectly content to be there. Others find their thoughts turning to a new home, perhaps even to a completely new way of life. Still others remain in their familiar homes while they are independent, but plan ahead to move to assisted living housing when they need it.
Here are a few things to consider if you or older family members have reached the point where a retirement move might be the best strategy:
Are You Over-Housed?
Are you rattling around your "empty nest," paying more than you want for taxes, utilities, and maintenance? If retirement means a cut in income, would a lower-priced home, town-house, or condominium be easier to manage on your resources?
Do You Need the Equity from Your Home?
For some older owners, the equity built up in a home is their main retirement savings. Sometimes a move is needed to convert that equity into cash and income to be secure for the years to come.
Is the Home's Upkeep Manageable?
Do you have the time, energy, or interest to paint, clean, mow, etc? Will the roof need replacing soon, or the heating/AC need repair?
Does Your Home Style Match Your Physical Ability?
Are there too many steps or step-down rooms in your current home? do you need a wheelchair-accessible residence? Is the yard more than you can handle? Are the safety, security, lighting, heating / AC systems adequate for retirement?
Do you want to be Closer to your Family?
Do you want to spend more time with your children and grandchildren? Maybe you would like to cut down on long trips to visit them, or perhaps you need regular assistance from a family member.
Would a Move Improve Your Lifestyle?
If extensive traveling appeals to you, for example, you may want to re-locate to a more economical, lower-maintenance home ("lock and leave," as we say in real estate). You may want to be more conveniently located for activities such as golf, bridge clubs, walking trails. Or you may just want to move near old friends or to a community where you can make new friends with interests similar to yours.
Careful planning and sound, expert advice are crucial to a successful move.
How Blaze Can Help
• Blaze has over 23 years of experience selling real estate full-time on the North Shore.
• She has a team that is there to meet all your real estate needs
Learn More About Blaze
The Tax Relief Act of 1997 Brings Relief to Seniors Too!
Under the old law, seniors (age 55 and over) could use a once in a lifetime exemption from federal taxes to shelter $125,000 of the profit from a home sale. Now, tax-payers of any age who sell their principle residence can pocket tax free as much as $500,000 in profit if they file federal taxes jointly, or $250,000 if they file singly.
The property must have been used as their principle residence for two of the prior five years. Homeowners can shelter the profit on the sale of a home as often as once every two years.
Gains above $500,000 or $250,000 are taxed at a new 20% capital gains rate, down from the former 28%. A rate of 18% may apply starting in 2001 to sellers who occupied their homes more than five years.
More Good News!
Even seniors who have already exercised the over 55 one-time exemption can make full use of the provisions of the new law. No more are home selling decisions dependent upon tax law. Under the old law, if both future spouses owned residences they wanted to use the exclusion for, they needed to sell and use both exclusions before they married or were limited to only one exclusion after the marriage. Also, if one spouse had ever taken the 55 exemption election alone or with a former spouse, the future spouse had to use their exclusion before marrying because no exemptions were available afterward.