I heard some people saying that you can get away from paying sales tax on a home?
2006-12-01 18:53:04 · 4 answers · asked by jklvpd62 2 in Business & Finance ➔ Renting & Real Estate
The biggest benefit of buying a home cash is that you have peace of mind. That no matter what comes up in your personal life, you have a place that is yours and that you don't have to worry about meeting a financial obligation.
I think you are confusing sales tax with property tax. There isn't going to be any getting away from that no matter if the property is paid for or not.
On the other hand, by paying cash, you are using up resources that may be directed towards other investments (other houses maybe). And having your home completely paid for will greatly reduce some of the tax benefits that a mortgage provides.
Either way (mortgage or buying cash), real estate is a great investment. If you have more than enough cash to purchase a home outright, I think you will not be disappointed.
2006-12-01 23:10:10 · answer #1 · answered by ga_rei_guy 3 · 1⤊ 1⤋
The only benefit is that you save the costs of obtaining a mortgage loan. The seller doesn't care - they are going to get cash either way. And there is no sales tax on real property.
The disadvantage is that you lose the benefit of leveraging your investment. The property is going to appreciate a certain amount each year and it doesn't care if you have invested $ 200,000 or $ 20,000 to purchase it. If it appreciates 5 % per year ( $ 10,000 ), you have made 5 % on your $ 200,000 investment or 50 % on your $ 20,000 investment plus the return that you are getting on the $ 180,000 that you still have. Your choice !
2006-12-01 19:41:56 · answer #2 · answered by Anonymous · 1⤊ 0⤋
As a buyer's agent, the biggest advantage I see in buying cash has to do with what kind of house it allows you to buy.
Lenders require that a house is "live-able". If you find a house that needs substantial repairs that don't scare you, that seller may be having trouble selling to most buyers because it won't pass appraisal. You on the other hand can give them a low offer, close fast and their headaches are over.
2006-12-02 00:52:40 · answer #3 · answered by teran_realtor 7 · 1⤊ 0⤋
You might get the home at a cheaper price for cash up front. The biggest thing is no payments.
2006-12-01 19:03:02 · answer #4 · answered by YoungTurk904 1 · 1⤊ 0⤋