And of course, there are a lot of other expenses to be careful about when selling a home, either quickly or later on. This includes tasks such as painting, staging, house and carpet cleaning, lawn care and gardening, and local moving costs. You'll start accumulating the benefits of owning versus buying, you'll build up capital, and if the real estate market increases in your area, the value of your home will also increase. If you bought a starting home and are now considering moving to another, you may be wondering how long you should own your home before selling it.
The time you stay in your home relates to the point where you are breaking even or exceeding that limit with respect to paying your rent. Perhaps you've taken a look at the real estate market and are already hoping to make a profit with a good sale price when selling your home. In this case, it might make financial sense to sell your home and not strive to increase your capital. For all these reasons, Black says that buying a home should ideally mean a long-term commitment to a particular geographical area.
The typical seller lives in their home for 15 years before putting it up for sale, according to the Zillow Group Consumer Housing Trends Report. This determines whether it makes more sense to rent or buy a home for a given period of time. A home is most people's biggest financial investment, so homeowners tend to stick around long enough to raise significant capital. Every time you buy and sell a home, you face closing costs, such as land transfer tax, real estate attorney fees, your realtor's commission, and more.
Buying and Selling Costs Buying and selling costs are an important and often overlooked factor in determining how long you should own your home before selling it. If you've owned a home for more than a year and make a profit from the sale, you expect a capital gains tax rate of up to 20%, depending on your tax bracket. It's worth noting that if you've lived in your house for less than two years, there are some cases where you may be exempt from paying capital gains taxes, such as if you move because of a natural disaster, death, or unemployment.