Everyone here at Maine Real Estate Choice located in the heart of the Maine Sebago Lakes Region is excited about this time of year. And for good business reasons beyond the grass turning green and the trees starting to bud with flowers, which are now appearing as the final snow piles swiftly melt away. This is the timeframe each year when buyers and sellers who want to take that extra step for staging or final improvements, often have additional cash flow and down payment funds thanks to the IRS and state refunds that are now appearing in individuals mailboxes, and often now directly into bank accounts via Direct Deposit. For those considering selling, as long as you have lived in the property you are considering selling for two of the past five years, here is something you want to understand fully. The two year Ownership and Use Rule is as follows and here’s the most important thing you need to know: To qualify for the $250,000/$500,000 home sale exclusion, you must own and occupy the home as your principal residence for at least two years before you sell it, of the previous 5 years. Your home can be a house, apartment, condominium, stock-cooperative, or mobile home fixed to land. If you meet all the requirements for the exclusion, you can take the $250,000/$500,000 exclusion any number of times. But you may not use it more than once, every two years, and the two-year rule is really quite generous, since most people live in their home at least that long before they sell it, and we as Americans move on average, once every seven years. By wisely using the exclusion, you can buy and sell many homes over the years and avoid income taxes on your profits.
One aspect of the exclusion that can be confusing is that ownership and use of the home don’t need to occur at the same time. As long as you have at least two years of ownership and two years of use during the five years before you sell the home, the ownership and use can occur at different times. This is a fact many recent renters and new Landlords may not fully understand. And regardless of these facts, inventory is still historically low as are lending rates however we are seeing interest rates now trending upwards so there has never been a better time to call us to represent you, as a seller or as you seek that Maine Sebago Lakes Region spot ideal for you. Call us today and make it a great week!