Is your home your most valuable asset? If the answer is yes, you are among the many Americans who hold much of their wealth in their homes. In fact, that wealth amounts to a collective $11 trillion across the U.S. for owner-occupied units, according to research from the Urban Institute.
The current economic climate has a major effect on real estate, with implications for buyers and sellers—especially those approaching retirement.
We’re coming back from the worst recession many of us have ever experienced, with continued growth potential, Jerry shares. Record employment, for example, is leading to very low unemployment, around 5.3% in California, which means a tighter job market.
Reducing the tax burden
Economic factors are playing a role for all households, and in particular for those approaching retirement, some of these factors point to home equity as a major retirement resource. But selling a home often means a huge tax burden.
Take, for example, a home sale with proceeds of $1 million. Due to capital gains tax, the home seller may pay as much as $350,000 in tax upon the sale of the home.
Through a 1031 Exchange, homeowners have the opportunity to sell real estate without paying taxes. This option can be extremely beneficial to retirees who are looking to make the most of their home equity in retirement.
P.S. Platinum’s network of experts are experienced in the 1031 Exchange process and we are ready to assist you in figuring out if this option is right for you and your home sale.