Blog 1
Lisa Li
Principal
Licensed Broker
Phone: 617-335-4829
e-mail:
lisali.realtor@gmail.com
WeChat: lisa_fengli00
Proficient in self-housing and rental housing in all good school districts and high-end districts in the Greater Boston area. If you need to buy or sell a house, please contact me.
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All blogs on this site are original, please do not plagiarize, all opinions and experiences are personal opinions, and are for reference only.
Is housing an investment?
Many people often envy those landlords who collect rent, and think that their rental housing is considered an investment. Little do they know, in fact, if you own your own house, then you are already investing! Don't underestimate your own housing, it is likely to help you dig out the first pot of gold in your life.
why? Because the United States encourages individuals to own houses. Take Massachusetts as an example, the home ownership rate is about 60%. The tax policy of the United States is particularly lenient on the money earned by individual housing. Everyone knows that Uncle Sam is very stingy, and everyone is very careful when filing taxes, lest the income that is missed will be targeted by the tax bureau, fined and black records. Received an Audit notice, no one is not hesitant. Can you imagine a large income that can be pocketed directly without giving a penny to Uncle Sam? have! There really is! That is the money earned from selling the house. Please see the official official document of the IRS in black and white:
If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home, provides rules and worksheets.
That is to say, if you sell your own house, the money you earn can be tax-free. The amount is 250,000 for individuals and 500,000 for couples filing jointly. For example, if you buy a house for 800,000 yuan and sell it for 1.3 million yuan, then the income of 500,000 yuan can be justifiably put into your own pocket, and you don’t have to contribute a penny to the land tax. Are you happy? Are you excited? Okay, let's count the money: If your annual salary is 500,000 (let me look up silently), then you need to pay 39.6% federal tax, 5.1% Massachusetts state tax, and 7.65% social security and social security taxes. Contribute 52.35% of the land tax to Uncle Sam, and the remaining $238,250 can be put into the pocket. . But if you make 500,000 from the sale of your own house, and the 500,000 in real money goes into your own pocket, have you ever calculated the account?
To be able to get the tax exemption, you need to meet the following conditions that are not harsh and that everyone can do with their eyes closed:
1. In the past 5 years, lived in the house for 2 years
2. The house is the main residence address, including your mailing address, billing address, driver’s license address, etc., which are not far from the work unit (this is to prevent people from making fakes)
3. The house was purchased normally, not through 1031 exchange
4. This tax allowance can only be used once every two years, and you cannot move house every year
Look, can you still say that self-housing is not an investment? If you make good use of this tax advantage, you can accumulate funds quickly. I have seen many people change houses in two to three years, carefully decorate each house to maximize the value, and quickly change a small house to a big one, and a shotgun to a gun. Some people may ask: Is it annoying to move house every few years? Then I want to ask this person: Is it bothering you to go to the boss every day to meet the boss? If you change the house but not the community, there is no pressure, but you can always live in a newly renovated house (renovate first and then move in), keep upgrading the house, and have more and more cash in your pocket. Remember, this is no payment Tax money. In addition, in order to ensure the value-added of the house, it is necessary to choose a high-end and popular area to ensure the quality of life of oneself and the growth environment of children.
Next, I will talk about whether to turn the self-housing into a rental house, and when is the best time. Stay tuned.