Save Taxes on a Second Home : Aim Retirement

Before the changes in the rules of capital gains, many people did not
purchase a second home until they have sold their primary home.
That was the rule of the day. That's the way they could roll over any gain
and avoid a high tax bill.

The changes in capital gain taxes now allow couples to pocket a $500,000
gain (For singles, it is just the half - $250,000) on that primary home.
If you want a place to vacation in now and move to later, try to locate a
well-populated area with good healthcare facilities and a job market and
also a good school district. You may not need the last criteria for your
retired life but a good school district is always associated with greater
appreciation of your home value..

Also, if you choose an income-tax free state, that can put about 10% of
your income back to your pocket after you move.

Last tip: If you live in your second home at least 2 of the last 5 years,
you will again be able to get the same capital gain tax break if you wish
to sell. These 2 years need not be consecutive. For example, you could
live in your house for a year, rent it for two, move back in for another
year and rent it again the year before you sell and qualify for the tax break.