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Downsizing in Marin: Challenges and Solutions [sponsored]

Is it time to start living a little lighter? Downsizing can be a great transition when done right. As a Marin realtor, I often hear from homeowners who would love to downsize, but feel stuck. Most worry that finding the right new home will be hard with inventory so low, and they are not eager to lose their current low property taxes and pay capital gains tax. Not to mention the challenges involved in putting the family home on the market and dealing with a move.  

This is where your realtor’s guidance and your tax advisor can really help. After many years of helping clients downsize their home, and having just done the big downsizing move myself, I’ve learned some great solutions for all of those concerns. Solid, experienced guidance is crucial.

Breaking through the tax bind. The first step of this process is to talk to your qualified tax advisors. These experts can show you ways to minimize both property taxes and capital gains. As you probably know, most home sellers can deduct the costs of sale from their taxable gain, and can also exclude $250,000 individually/$500,000 per couple from capital gains taxes. Your tax advisor might also find that in some cases, rolling the remainder of the gain into an investment property is an option. 

You may also be able to keep your low property taxes. Ask your realtor and tax advisor about a Prop 60 Transfer. Generally, Prop 60 allows anyone over the age of 55 who sells their home and purchases  a new one –– both within Marin County –– to take advantage of a one-time allowance to transfer their property tax basis to their new home. While there are some conditions that need to be met in order to take advantage of Prop 60, such as the new home being of equal or lesser value than the home sold, this is a potential benefit well worth looking into. Details are listed on the County Assessor’s Office site: marincounty.org and for those 55 or older.

So that’s the good news on tax help for downsizers. Now, how about the challenges of selling your home and buying the new one?

Since this aspect of downsizing has far more options and details than will fit in this brief blog post, I’ll go into more detail in my next post, “Dowsizers’ Dilemmas & Solutions, Part Two.” I’ll cover:

  • Buy first, sell first, or aim for a simultaneous close? Much depends on which Marin community you live in.
  • Sell privately or go on the MLS with full exposure to the market? A very individual decision with pros and cons to consider.
  • How to prepare for market when living in the home? Your Realtor can really help a lot with this.

In the meantime, feel free to contact me:

Sharon Faccinto
McGuire Real Estate, Mill Valley office

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