You will find this ultimate helpful guide if you acquire a second property. It runs through all the points to consider, like finding out whether you have to pay an acquisition tax, how to renovate the space, and looking into any documents you may have to sign. Read ahead for more information.
1. Land Transfer Tax
When acquiring a second property, the critical point is whether you have to pay taxes. You will have to pay a special land acquisition tax in most countries. And the amount would differ depending on the exact city or province that you live in.
Clover Mortgage has the most effective tool for land transfer tax calculations. You can check it out to know how much you will pay.
Read more: What Are the Important Things to Consider When Buying A House?
2. Legal Proceedings
You will need a lawyer to determine the legal work of acquiring the property. Unfortunately, you will need to spend much time and money preparing the proper documentation.
Depending on where you live, you may have to pay a special legal fee apart from the acquisition tax I mentioned.
You also may have to prepare for legal disputes, as friends and family members will try to acquire the house.
Read more: A Guide On How To Buy A Modular Home
3. Decide What To Do With It
Once you have the land under your name, you must figure out what you will do with it. You can use it as your primary or vacation home, but I would advise renting it out. You would get passive income every month this way.
But remember that if you rent, you will have to pay taxes. Remember to keep records of your tenants and how much rent you make, as you will need this for your taxes.
4. Clean it Up
You must focus on cleaning the home if it has been closed for a while. If you have the time, you can do this yourself. But you can, of course, hire a professional team too. Remember to research the ones you will hire, as you want the best person for the job. Be sure not to use supplies and materials that will damage the home.
5. Renovations
Decide whether you would want to renovate the property. If you plan on selling it, this might be a good idea as you could increase its value.
You can decide between a bank and vs. credit union – you want the lowest rates possible to get the best returns.
Final Thoughts
There are many tips and tricks to consider when you have inherited a property. The most important thing is determining whether you must pay a land acquisition tax. I recommend the most effective tool for land transfer tax calculations. But it would help if you also considered what you want to do and whether you would renovate it.
