When looking to buy a Stowe vacation property, consider its rent-ability regardless of your desire to rent it out. If a Stowe home for sale appears to have a highly desirable rental potential, then it will be easier to sell when the time comes. Buying Stowe real estate (or real estate in general) does involve foresight and part of this relates to re-sale value. This being said, if you are planning on renting your new home or condo, factor your monthly expenses without including rent. There is no guarantee of rental income and knowing that you can afford the home without rental income will make the rental income that you do receive a bonus.
Buying a ski home in Stowe, Vermont, has its tax benefits. How much tax relief you get from your Vermont ski home depends on how you intend to use it. If you decide to rent the house year round, then it is considered a rental property. If you decide to use it for personal use and live in it for part, or all, of the year then your ski home will be a personal residence. Of course there is a third option, which is a combination of renting the ski home and using it yourself when it is available.
If the home for sale in Stowe becomes your residence, then you are entitled to the standard mortgage interest write-off come tax time.
If you decide to rent your ski home and use it when it is not rented in order to be able to write off the mortgage interest you need to live in the home at least 14 days per year or 10 percent of the days it is rented, whichever is greater. You will need to claim a portion of the mortgage interest against the rental income.
When renting your home for more than 14 days a year you can claim deductions on: mortgage interest, maintenance, utilities, insurance, depreciation, and other miscellaneous expenses.
Another interesting advantage of owning a second home is that if you rent your home for less than two weeks you do not have to claim the rental income. In this scenario you own a personal residence, earn tax-free income, and at the same time can write off the mortgage interest on your Stowe ski home.
The decision to buy a second home, whether for rental purposes or personal use, leads to a variety of write offs come tax time. Before buying Stowe real estate it might be a good idea to sit down with your accountant to discuss the tax implications and benefits of owning a second home.