Before we begin, please note that Black Canyon Builders is neither offering financial guidance, nor are we tax professionals. Our goal with this post is to gather resources to help you prepare for consult with your financial and tax professionals.
With tax time season just wrapping up, you may be contemplating the financial benefits and costs of building a vacation or second home. Land prices are still suppressed in the Southwest and loan rates are still at all-time lows. It’s a great time to build.
Vacation Home or Rental Home: Did you know that you are allowed to rent your vacation home for 14 days or fewer without claiming the rental income? Use it as frequently as you’d like for your family and friends, and let the rental income offset some of the costs. Other scenarios present different tax implications, with deductible opportunities and the need to claim rental income. Click here for general info, then check with your CPA.
Interest Rate Deductions: If you exclusively use your second home for your own vacations (i.e. no rentals), the mortgage interest and property taxes are fully deductible. Click here for more info and check with your CPA.
Think Toward Retirement for Equity and Reduced Expenses in the Future: If you know you’d like to retire in Southwestern Colorado, start planning now. With interest rates low and property values destined to increase over the long run, a vacation home now is a solid investment in your future. Click here for more info and check with your financial planner.
If you’re ready to build, click here and check in with Black Canyon Builders!