Sell Your House After 2 Years: Considerations and Advice
Jun 14, 2024
“Consider different factors before selling a house purchased 2 years ago”
Selling a house after owning it for 2 years is permissible as there is no legal binding for sellers to hold a house for a certain period before selling it. You can sell a house on the next day after receiving the keys. But the question is, how wise it is to sell a house after owning it for just 2 years? Several factors need consideration before selling a house that you purchased just two years ago. In this blog post, we will highlight some of the considerations for a seller intending to sell a house after 2 years of ownership. Continue reading.
1. Consider the Terms of Mortgage
Check your mortgage agreement before deciding to sell a house is one of the main factors. Most of the mortgage lenders put a time restriction on selling a house and this restriction is known “mortgage tie-in period’”. This restriction on house sales from mortgage lenders usually ranges from two to five years. Violating the terms of a mortgage agreement in respect of the mortgage tie-in period can lead to early repayment charges. These charges can be a significant percentage of the outstanding mortgage balance. Thus, considering a mortgage agreement before selling a house owned for 2 years is essential.
2. Consideration for the Tax Implications
The next consideration is for the taxes and fees associated with the house selling. A major tax involved in house selling is the capital gains tax and holding a residential property for a longer time can make you eligible for some tax exemptions. Selling a house after holding it for only 2 years means paying the capital gains tax at a high rate. The tax is levied on a high rate for the profit earned from a short-term investment. Capital gains tax is charged on the profit you make from selling a house. Therefore, selling a house after 2 years of ownership makes you liable to pay a significant amount as capital gains tax.
3. Stamp Duty Land Tax (SDLT)
The stamp duty taxes are usually paid by buyers at the time of property purchase and add a significant cost to house buying. Selling your house shortly after buying it might result in a smaller profit than expected. Calculating the costs of stamp duty tax and other fees before selling a house is important to determine the net profit.
4. Analysing the Market Conditions
Another consideration for sellers planning to sell their houses after 2 years of ownership is to access the market conditions. You can determine the best time for selling a house by analysing the market trends and predictions. Sell your house when there is a growing demand for new houses but the supply is limited. This condition is called “seller's market” and you can make a good profit by waiting for this market condition.
5. Home Improvement and Other Selling Costs
Selling a recently purchased house can cost you more as you need to spend a good amount on home improvement, getting home reports, and marketing costs. Seasoned investors believe in holding a property for at least five years before selling it. This shows that the longer you hold a house the more you are going to get the profit. However, if you want to save on marketing costs, create an online listing for your house. Estate Agent Power is available to post free ads for house sales by creating an attractive listing.
To conclude, selling a house after 2 years is permissible but not a good idea as it involves various selling costs that can impact the net profit. Consideration of various factors is essential to make the right decision about selling a recently purchased house. Keeping your house for at least five years is suggested to earn good profits when selling it. Selling a house after 2 years of ownership may lead to the risk of financial loss.
