The government typically assumes that if you sell a home that has equity in it, that amount of money that you make over and above any mortgages or liens on the home should be considered as profit. Typically a seller would then pay taxes on that amount at the end of the year. However, with 1031 deferred exchanges, you may actually put off paying taxes on this home for some time. How so?
• The first step is to create a financial strategy and calculate how much you can afford to invest. • Find out about other costs (e.g. solicitors, stamp duty, survey/valuation fees, broker/lenders fees etc.) • Decide which solicitor you are going to use. • Research the market. What type of property will provide the best returns (i.e. increase in value and rental returns). Will you manage the properties or will you employ somebody else to manage them for you? • When you have found the right property, and have all your finances in place, make an offer |
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