Dear Monica: My wife and I love our home which we built 30 years ago but it’s too large for us now that our children are grown. We are paralyzed though and can’t move because we don’t want to pay the capital gains taxes we will owe. What is your advice for this situation? Bill T.
Dear Bill: There are many homeowners who are facing the same issue as you are. They want to move but are afraid of the capital gains they will have to pay when they sell. For some owners the thought of paying this keeps them from selling. There are a few ideas you should think about however.
Paying the tax may not be as bad as you think especially if selling and moving allows you to live the next phase of your life in the place you want to be. Also your expenses in your large home are probably high and moving to a smaller place with lower costs could offset the tax you would pay. It is a shame to let a tax consideration keep you a prisoner in a home you have loved.