There are significant differences between buying a vacation home and buying a primary residence. For homeowners who want to buy a vacation home, it's important to understand these differences. Knowing what to expect can help the home buyer prepare for the experience.
What You Need to Know About Taxes
Taxes become expensive for people who own vacation homes when they try to sell the property to someone else. Selling the vacation property to another person results in capital gains tax for the seller. Generally, vacation homeowners who sell their property are taxed on the difference between the amount that is received and the tax cost of the property.
Making improvements and additions to the vacation home can help with this, however.
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