For those of you contemplating capital gains: if (big if!) you can afford it, it seems foolish to negate possible benefits to moving. I for one don’t own a home and live in a high-tax state. Although sales and income taxes here are annoying, I appreciate the services offered to residents by my city and state. Just my very humble opinion.
One of my nieces (late 30s) has moved to several different cities with her husband, an engineer, and their kids. She’s a dental hygienist. They’ve built a house in each place they’ve lived and they airbnb the houses they leave behind.
You can lower your capital gains by deducting home improvement costs over the time you owned your home. These can include - additions, roof, HVAC, major landscaping, etc.
If retirees will only be needing some of their equity from house, is it allowable to sell to child (or other relative) at a big discount? I realize that desire to do this would not be a common scenario, but there are families where grandparents might like to give this kind of boost (especially if an only child).
Yes, you can do this, but the IRS monitors below market transfers and might send you a letter requesting that you file a gift tax form for the difference between the market value and transfer value. This is what a WA estate taxation attorney told us.
Interesting. My dad deeded the house to one sister about a year before he died. No issues at all. It was her home too…and we all agreed. It was the perfect downsize house. All one level, and not huge.
Problem for those of us who have owned our home over 30 years: We’ve replaced the roof 2x, some appliances 3x, 2 furnaces, and more duplicates. You can only count the “last” improvement, not all of them. It would have been smarter to move every 10 years.
I believe that in community property states, the surviving spouse gets a stepped up basis as well. So couple buys the house 30 years ago for $500,000 and the house is now worth $1,500,000, the widow or widower who sells would use the $1.5 as the basis and when they sell pay capital gains on the sale price minus $1.5. (If that amount is over $250,000).
This is what happened with my parents. They inherited their house from my grandmother back in the 90’s. When my mother died, ownership passed to my father at the current value. When he then sold it a few years later, his base was high, and he didn’t have to pay any capital gains taxes.
Visiting other states to check out downsizing locations?
Hub and I are planning to go to FL soon to visit his dad and check out the state as a future retirement/next stage/downsizing location. We’ll also spend a bit of time with his brother (lives one hour from dad).
Wondering how long others would take for this type of visit?
We are a 2 hr plane flight away. Was figuring aa day of travel on either end and two full days in between? Or maybe three? I only have a 5 days of vacation left this year so trying to save a few for daughter’s holiday visit in Dec.
But…don’t want to spend $/make the effort to then short-change the 'getfor what it’s like to live there.
You probably know this already, but before you decide to move to Florida, you should consider making multiple trips, including one in the heat and humidity of August. If it is really a contender, then I would suggest multiple at least week long visits.
This. The people we know who eventually chose to move to FL (and elsewhere in the south) rented there for a couple of winters in or near the communities they liked. That way, they could get a feel for the local culture, and amenities.
I don’t think a week is anywhere near enough to evaluate a place. Maybe it’s ok to decide a place to rent, but not to buy. My husband and I have been traveling to Florida for three years now and since I’ve retired we’ve been spending several months at a time. We still are not sure about relocating. We’ve definitely ruled out some places but there is so much going on there between storm damage, flood risk, insurance increases (house, flood, car are all high), and property tax increases that we still are uncertain about whether or not to relocate.
I used to visit my parents in Florida (they rented a place Jan - March) and it was lovely. But not sure I could tolerate the weather May-October. A HS classmate and his wife moved there a few years ago and moved back in less than a year. They could not take the weather.
Also be sure you can find the medical care in wherever you may relocate too. I would definitely try living wherever several months at the “worst” times of the year weather wise and try different communities to get a flavor for where you might be happiest.
Thanks so much for these insights! I appreciate them.
We are definitely planning to visit multiple times for any place we’d think about moving. And for sure (I think) rent for a few months even after a decision (prior to purchase).
This is just a first foray. I haven’t traveled a ton so was trying to gauge whether 2 full days is reasonable to even get a flavor.
I will say that the bit of traveling I’ve done recently (for work and to visit kids in another state) has been entirely exhausting, That alone might argue for adding another day to a trip, to build in some chill time.
I really like the suggestion of renting for a few months even before deciding to move somewhere. I had pictured renting (long term) before buying (just as a precaution) but not part of the assessment process itself.
We talked about this with @Jolynne_Smyth upthread in Jan ‘23, and I replied that it takes immersion in a community to really get a feel for the day-to-day living in a place. I concur that renting is the way to go, but I’m currently viewing the pics of my brother helping to rebuild his youngest daughter’s house after Helene and Milton went through and would seriously reconsider any place where hurricanes are a given but flood insurance isn’t.
True, Choatiemom. Immersion is best. Not sure if I could afford to carry a mortgage in current state and Air BnB in another for a few months - but relocation is a hugely impactful decision and want to do whatever is possible to get it right.
That being said, ai talked to two people tonight who had vacationed in other states, fell in love, and bought shortly after.
My conservative, research-oriented nature would likely not abide that! Lol.
Also agree about the weather. I could see adapting to a warm climate. Would likely need radiant heat floors to manage a cold weather sojourn. Lol
We have done something similar. Identified state and general area we thought we would like (100 mile range). In separate years went on a couple week vacation staying in 2 different places each year. Tried condos and houses. Tried waterfront, not waterfront, communities, scattered houses. Chose most likely area and stayed 3 weeks, trying not to be a vacationer- eating in and doing housework and hosting guests both family and friend and paid attention to places, traffic, services, restaurants, things to do in that general area, potential for making friends. The next year we started with an excellent real estate agent before we visited, looked at 2 doz houses in 3 days and bought a place we love in a community we love. We do go back to our other state for a few months a year.
