May 09, 2007

Buying A Second Home: Part Two

Consider the tax implications before buying a second home.

Are you ready for a warm-weather getaway in a vacation home after the bitter winter? If your answer is “yes,” you’re not alone. Buying a second home has become a popular practice and it can be a great investment. But there’s a lot to consider before making the purchase.

In our last post, we briefly mentioned the financing issues the come with buying a second home. Today, we’ll discuss the tax implications of owning a second home.

Taxes with a second home can be confusing, especially if you are renting out your property during the year. According to the National Association of Tax Professionals®, if you rent your home for 15 days or less you are not required to report your earnings. However, if it is rented out for more than 15 days, you are required to file it as additional income. Remember you may be able to deduct the cost of repairs and maintenance that you put into your home.

Stay tuned for our next post when we’ll tell you how to pick out the right location for your second home. For more home-buying advice, contact a Real Living agent or visit RealLiving.com today.