Asheville, North Carolina is a popular vacation spot for visitors from across the United States (and around the world) – so much so that many people decide to purchase a second home here in the mountains. If you have enjoyed your vacation home in the Asheville area and now need to part ways with the property, we’re here to help. Selling a home is a complicated process in general, and selling a second home has some complexities of its own. Keep reading to find four tips on selling a second home in Asheville, NC from the real estate experts here at Freestone Properties – and if you are looking for a local listing agent, contact us today.
1. Take advantage of selling from a distance.
If your primary residence is far from Asheville, don’t sweat it. You’ll find that there are actually many benefits to selling a home you aren’t living in. For instance, your home will always be available for showings, with no inconvenience to you. If you are currently using the home as a short-term rental, one of our listing agents can coordinate showings, inspections and appraisals with the help of your rental calendar. In fact, if you’ve been renting it out, it will most likely photograph well when listing photos are taken between guests.
Your agent will also check on the property regularly to ensure it’s in great shape for potential buyers, providing you with additional peace of mind. If your home is furnished, it can be sold with the furniture included; alternatively, your agent can help coordinate movers or arrange for the items to be donated. Once you have a buyer, the closing can be completed from a distance, so you won’t have to worry about taking time off to travel to your property. Overall, selling from a distance is optimal if you want to sell your home quickly and with as little hassle as possible.
2. Work with a list agent you trust.
While selling from a distance has its perks, it’s only stress-free if you’re working with a list agent that has your back. It’s important that they are responsive, professional and able to maximize your home’s potential selling power on the market. Working with a local agent who is able to take a hands-on approach to the sale of your second home can take the weight of long-distance selling off your shoulders.
Over the years, the Freestone Properties team has helped many clients sell their Asheville vacation homes, and we would love to work with you, too. With years of experience selling Western North Carolina real estate, and with a special focus on luxury properties, our team has the experience and know-how you’re looking for. We’ll focus on your second home’s unique features, highlighting the benefits of its location and its suitability for those looking to buy a vacation home in Asheville. Your Freestone list agent will do the heavy lifting for you when it comes to all the details of the sale, working to draw in qualified buyers and secure high-quality offers for your property.
3. Prepare for additional taxes.
*** Please not that Freestone Properties is not an accounting firm and this article should not be considered tax advice. Real estate sellers and buyers are advised to discuss tax implications with a Certified Public Accountant.
Many sellers are unaware of the taxes on selling a second home. When you sell a home that is not your primary residence, the IRS requires that you pay the capital gains tax rate on the profit. While these taxes are an unpleasant part of selling your vacation home, there are some ways you can potentially pay less, depending on your ownership costs (more on that later).
Aside from this, there is one notable situation in which you can defer paying them). In the case of a 1031 Exchange, the IRS allows sellers to defer the tax liability if another investment property is purchased within a certain period of time. While the tax liability doesn’t go away, it can be deferred if you invest in a replacement property.
4. Consider your timeline to lessen capital gains taxes.
Timing can make a big difference when it comes to selling your second home. If you anticipate being hit hard by the tax implications of the sale, don’t rush to sell, even if the market seems favorable at the time. It’s important that you’re prepared to handle the capital gains tax that you’ll be charged when tax time rolls around, so if you need to wait until you’re fully prepared, we recommend doing so. Can’t wait, and need to sell now? Motley Fool recommends setting aside a portion of the profits from the sale in an out-of-sight bank account until tax season. That way, you’ll know you have money in the bank to cover the extra taxes.
Selling a Second Home in Asheville FAQs
Q: What expenses are deductible when selling a second home?
A: To offset the capital gains tax, you can claim deductions based on certain parts of your cost basis. According to HomeLight, your cost basis includes how much you spent to buy and improve the home. Out of this cost basis, you can deduct acquisition and closing costs and the costs of home improvements you completed that led to an increase in property value. If you have any doubts about what can be deducted, check with your tax advisor.
Q: How much tax is on selling a second home in NC?
A: The state of North Carolina charges an excise tax to the seller on the sale of any real estate. This tax is also referred to as “revenue stamps.” The tax is $1 per $500 of sale price. So a home sale for $1,000,000 would result in $2,000 paid to the state at closing.
More importantly, it’s worth considering if your home sale will be taxed as a short-term or long-term capital gain. Assets held for more than a year are considered long-term capital gains.
If you are not a North Carolina resident, the North Carolina Department of Revenue states the following: “Generally, any gain recognized for federal income tax purposes by a nonresident from the sale of real property and its associated personal tangible property located in this State is also subject to North Carolina income tax; therefore, a nonresident who sells real property located in North Carolina is required to file a North Carolina individual income tax return and pay the tax on the portion of the federal taxable income that represents the gain from the sale of the property.”
Q: Can I have two primary residences?
A: No. The IRS requires that only one primary residence is listed on your taxes, even if you travel between residences for work or you split your time between your primary residence and vacation home, per Rocket Mortgage.
Selling Your Second Home in Asheville, NC with Freestone Properties
If you have additional questions about selling your second home in Asheville, NC, we’d love to answer them. The agents here at Freestone Properties are experts on the Asheville real estate market, so you’ll be in good hands when you work with us. Contact us today to get started.
