Can I Buy My Own Residence With an LLC in New Port Richey?
The real estate market in Florida is currently slow, and many homeowners are struggling to sell as inventory continues to accumulate. While buyers are spoiled for choices, sellers find themselves in a state of limbo. What if you desperately need to sell to move on with your life, access equity, or get a new home somewhere more desirable? Is it possible to purchase your own home using an LLC? This is something you might want to discuss with an experienced real estate attorney in New Port Richey.
The Potential Benefits of Purchasing Your Own Home With an LLC
The main benefit of purchasing your own home with your LLC is simple: Accessing equity. In a booming real estate market, this thought might not even enter your mind. If people are eager to buy your property, why would you complicate things with an LLC transaction? When markets are slow, however, many people are willing to do whatever it takes to access the equity in their real estate holdings. This strategy is just like a normal sale, but the buyer is your LLC.
Another potential benefit is the fact that you get to keep your property while still accessing the equity. When you continue to hold the property, it may rise in value over the years, representing a continued investment with gains long into the future. In other words, you get to enjoy the benefits of a “buy and hold” investment strategy while also cashing in.
If you decide to rent out the property under your LLC, you might experience even further gains. As long as you set your rent at an appropriate level, you can continue to hold the property with no ongoing losses (assuming you’re taking on a new mortgage). A rental property represents a new venture for your existing LLC, and all expenses related to the rental income should be tax-deductible.
The Potential Downfalls of Purchasing Your Own Home With an LLC
On the other hand, this strategy presents numerous potential issues. First, you might incur considerable capital gains taxes with this transaction. Although there may be ways to get around these taxes with help from an experienced accountant, this is definitely something to look into before you move ahead.
Another potential issue is the loss of your homestead exemption. This shouldn’t be much of an issue if you’re planning to purchase a new property, but you might want to reconsider if you’re simply accessing the equity in your home to buy something else. The homestead exemption in Florida is incredibly powerful, and it is a viable asset protection strategy in its own right.
Can a New Port Richey Real Estate Lawyer Help?
If you’re exploring options involving LLCs and real estate purchases, consider speaking with a real estate attorney in New Port Richey. These legal professionals may be able to offer meaningful guidance as you determine whether this plan is viable. You might also want to speak with an accountant about the logistics of this plan, particularly when it comes to tax issues. That being said, purchasing your own home with your LLC can be a viable strategy in certain situations. Learn more by contacting Athanaselos & Associates P.A. today.
Sources:
myfloridalegal.com/print/pdf/node/1901
irs.gov/taxtopics/tc701
