Want To Buy or Sell a Home? How To Get a 3% Mortgage Rate, Negotiate Fees, and More

The current housing market is tough, but not impossible to navigate according to savvy professionals. With high interest rates and low supply, there are ways to maximize your return and minimize your tax liability before you sell.

Partner Mike Zovistoski explained selling your primary residence allows you to exclude from federal income tax up to $250,000 of the profit as an individual or $500,000 as a couple filing jointly. This only applies if you have lived in the residence for at least two of the last five years and have not sold another hold in the prior two years. For state tax rules, Zovistoski said to check local laws as they vary.

“Since home prices have appreciated so much over the last five years, many people selling could probably use this exclusion,” he said. “If you’re thinking about downsizing, you could sell your house, buy a smaller less expensive home in cash and pocket any difference without paying tax on it.”

Itemizing your deductions could also allow you to deduct mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt. For people who are married and filing separately, the limit drops to $375,000.

As for what adds the most value to your house, Zovistoski recommends taking steps toward solar and energy efficiency. It can add value and qualify you for tax credits, he said.

Read the full article published by USA Today.