Are you looking for the best tax free investment? If you own house where you currently live, you might be eligible for tax exemption.
First and foremost, what do you mean by tax free investment? For example, you have sold the house you have lived in – in that case you will be eligible for tax exemption and you will get to keep the whole amount. Here occupation has no significance. Have you stayed there for the last 36 months as the owner of the house? Then you are eligible for tax exemption. We hope now you have got an idea about tax free investment. However, you will have to deal with several scenarios here. For example, rules may not be the same if you own two houses or you weren’t an owner for a period of time.
Let’s see a few special cases where Tax exemption is available.
- In case if you own two houses, you will be given tax exemption if you have been an occupying for more than 3-year period.
- Being an owner alone won’t work. You should reside in both the properties to be considered for tax exemption.
Let’s examine the case of a dwelling house. Well, when it comes to a house, even a houseboat and well-maintained caravan would be qualified. It is just that it should have a couple of basic facilities like telephone, water and electricity. Also, you should be a permanent owner and you should be residing in the dwelling. Also, converted buildings also would be qualified including barns, warehouses, churches, windmills, lighthouses and many others. If you want to Learn More about Investment Opportunities in the US, click here.
Let’s examine few interesting cases regarding a dwelling. Let’s assume that you have more than one property in the case of a dwelling. Here you will have to exempt few and you will have to decide which one should be exempted. Let’s take the case of the small building – is it secondary to a main building? Does your staff live in this small building? Or was it built keeping that purpose in mind? Is this secondary house too far away from the main one? If it is far away, one cannot consider them as a single unit. This is an interesting case which clearly needs more introspection.
Garden or grounds
Now let’s examine the case of garden or grounds or yard. You need to understand the fact that they also come under the purview of same exemption. They also enjoy the same exemption as the house. But the only thing here that it must be for your own enjoyment and occupation.
Is there going to be an exception? Well, as long as you are able to prove that the greater area is meant for your own enjoyment, then you will be able to walk away with the exemption. However, they will consider the overall character and the size of the house into consideration. There are so many things that will make the definition clearer.
Length of occupation
Length of occupation is another important matter you need to consider. How long have you been living there? Well, the continuity is a big factor. There should not be gaps in the occupation.