Tips for Buying & Selling
Palm Springs Vacation Homes
Many Canadians, out-of-state Americans, and other foreign nationals are contemplating purchasing a vacation home in Palm Springs. In fact, according to NAR, 85% of Americans are seriously considering purchasing a second home.
As a result of the demand from foreign nationals, vacationing Americans, and locals, many are also looking to sell their vacation property in Palm Springs as well. However, there are many questions that both sellers and buyers of vacation homes have about vacation real estate in Palm Springs.
Continue reading to find out the ins and outs of buying a vacation property in Palm Springs or skip to the tips for sellers here.
Buying a Palm Springs Vacation Home
As many Canadians, foreign nationals and out-of-state Americans have found out the hard way in other jurisdictions, vacationing in a city and being a home owner in a city have to very different sets of requirements.
That being said, Palm Springs is a haven for second home owners and vacation property owners. It’s not a surprise considering Palm Springs’ international reputation, the warm winters, and the fabulous architecture. But, there are many things you should know prior to purchasing a vacation home here, three of the most important are below.
Know the regulations about AirBnB
In April 2017, the local government passed a law which limits the number of apartments and number of times an owner can AirBnb their home, with violators being fined excessively if caught. As the new law comes into effect, the limits include:
- Homes can be rented 32 times per year;
- Permit fees balloon from $234 to $900 per year;
- Failure to report a rental agreement results in a fine of $2,500;
- $5,000 fines if caught operating a vacation home in Palm Springs without a permit;
Determine the ideal location
Palm Springs and the surrounding areas of Cathedral City and La Quinta have a wide array of property types, styles, and rules. For example, in Palm Springs there are two types of property ownership, lease land and fee land. Lease land is owned (and leased) by the Agua Caliente Band of Cahuilla Native Americans. Whereas, fee land is your land.
Consider the market conditions and your personal finances
On top of the cost of the property, don’t forget to factor in closing costs, furnishing costs, and any repairs or alterations you wish to make immediately. On top of this, if you are a Canadian purchasing a vacation home in Palm Springs be aware of where the “loonie” is to the US dollar as this can dramatically affect the price of your property and a number of times you are able to visit your home away from home.
Selling a Palm Springs Vacation Home
Beware of capital gains costs
As with when you legally rented your Palm Springs vacation home, when it comes time to sell your vacation property, you will want to ensure that you are notifying the Inland Revenue Service. On top of the normal capital gains costs, foreign buyers are subject to a 15% U.S withholding tax, as well as any capital gains costs in the country where you reside. Don’t forget to factor all these additional expenses when selling your Palm Springs vacation home.
Know when to file your taxes
California state personal income tax returns have to be filed by April 18th 2018. Whereas, federal taxes have to be filed by April 17th 2018.
Don’t sell yourself short
With all the additional costs when selling a vacation home, especially for foreign buyers, it is easy to fall into a negative capital situation. However, you can easily avoid this by contacting a professional real estate agent like Geoffrey Moore who will be able to calculate the most optimal price to sell your Palm Springs vacation home for.