As an experienced real estate investor, the largest asset of selling property with Owner financing is you will minimize the capital gains tax (CGT) has hit you would receive over time. If you’re selling your house, a capital gain exclusion applies to a $250,000 exemption if the house has been lived in as a primary residence for the last two out of five consecutive years. You can get the exclusion by filing your federal income tax return as an individual or self-employed. It is not taxable to receive a CGT. Selling with Owner financing requires no tax or income tax on the sale.
The most recent piece of real estate legislation that may help you when it comes to selling property with Owner financing is the home seller’s affordability relief act. This act was enacted by the Financial Services Authority of UK and is commonly referred to as the DOFRA. The purpose of this act is to prevent unscrupulous sellers from taking advantage of buyers by pushing prices above market value. To qualify for the DOFRA, the home owner must have met a set number of specified requirements and obtain approval by the Financial Services Authority.
When it comes to selling property with Owner financing, there are other considerations. These are primarily about the tax implications and capital gains tax liability. Capital gains tax is charged on any rental property that increases in value. In general, the greater the value of the property, the higher the Capital Gains Tax. If you’re getting owner financing, it is in your best interest to keep your property’s value stable so as to minimize your CGT.
Your choice of lender will also have an effect on the amount of your selling price and the tax consequence. For example, if you choose to use a company that provides owner financing, you will need to pay the full amount of the loan plus the Capital Gains Tax. If you take out a loan from a conventional lender, your total cost will be dependent on the amount of interest you pay, your personal rate of interest and your repayment schedule. The advantages of doing your buying with Owner financing are the flexibility you have as to payment amounts and your ability to control the tax consequence as regards your gain or loss. Look up “how can I sell my house quicker” online to know more.
One other important consideration to make when selling property with Owner financing is whether to use a specialist agent. A full service agent will charge you a fee for his or her time, not just to perform the task of selling the property but also to check the various documentation to make sure that the deal is compliant with UK law. You will therefore want to investigate the costs and benefits of using an agent before deciding to employ one. There are various types of Home Sale Dealers including full service, agency, self-service and independent and you need to consider what type would be best for your needs.
You may also wish to consider using a third party provider to carry out some or all of the tasks involved in the selling of your property. You could employ a solicitor or agent who specialises in selling property, allowing you to concentrate on finding potential buyers and making the home sale as efficient and stress free as possible. Using a third party agent will make it easier for you to concentrate on marketing your home and give you the confidence that you have someone who is professional and knowledgeable enough to represent your interests effectively. Find fast property buyers in my area now!
For more on home selling, check out http://www.ehow.com/how_111063_sell-house.html.