Approximately 52 million or 16% of Americans are age 65 and over. It is easy to understand that some are thinking of downsizing their home because they don’t need the same space as in the past.
It can be liberating to divest yourself of “things” that have been accumulated over the years but are no longer needed. Moving to a less expensive home, could provide savings for unanticipated expenditures or cash that could be invested for additional income.
Savings can be realized in the lower premiums for insurance and lower property taxes, as well as the lower utilities costs associated with a smaller home.
Typically, owners downsize to a home 1/2 to 2/3 the size of their current one. In some situations, it is not only economically beneficial, but their interests may have changed so that a different style of home, area or city might fit their lifestyle better.
The sale of a home with a lot of profit will not necessarily trigger a tax liability. Homeowners are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home for at least two of the last five years if they’ve not taken the exclusion within the previous 24 months.
Homeowners should consult their tax professionals to see how this may apply to their individual situation. For more information, you can download the Homeowners Tax Guide.
Call me at (316) 337-5154 to find out what your home is worth and what it would take to make the move to another home.