Do you love the idea of spending time with your family in the warmer climates during the winter season? As the cold weather rolls in, we pull out our sweaters and winter clothing. But, many people are grumbling about the cool weather because it’s harder to spend time with the family outside.
If you enjoy having your primary residence in the Atlanta area, but you would like a second home in a warm climate like Florida, then right now is a good time to talk to a real estate expert. Before you jump into the purchase, it is important that you understand the financial implications so that you can minimize tax burden as much as possible.
Primary Residence, Second Home, or Investment Property?
When you are buying a home, the best scenario is for the home to be labeled as “owner occupied” so that you can take advantage of the tax benefits. Lenders look at these properties in different ways, so they will go through a list of requirements to determine if it is a primary residence, second home, or investment property.
For a primary residence, you can get better interest rates and tax benefits compared to a second home. In this situation, the owner needs to live on the property for most of the year, have the home in a location that makes sense for their employment location, and the owner needs to acknowledge that they plan to occupy the property within 30 days after closing.
In comparison, a second home is a reasonable distance away from the primary residence, and the home needs to be occupied for a portion of the year. With an investment property, the owner doesn’t occupy the space.
Making the Second Home Your Primary Residence
If you want to buy a second home and make it your primary residence, then you need to consider a few options for your first home. You might consider renting out the property or finding someone to occupy the home so that you can move into the new home.
To have your second home quality as a primary residence, you need to establish residency in the state where the home is located. Work on tasks such as setting up utility bills, bank statements, changing your driver’s license and submitting voter registration paperwork. Additionally, it is necessary for you to occupy the home for at least 730 days in a five year period. Those days don’t have to be continuous, but the overall occupied time needs to add up to 24 months.
When you are ready to learn more about buying a second home and using it as a primary residence, then you should talk to our experienced team at DUFFY Realty. We are here to help you find the right property for your family: (678) 318-1700