Don’t let capital-gains tax worries delay your next chapter with the grandchildren

Older adults selling the family home can have a trifecta of protection via their real estate brokers, elder law attorneys and tax professionals

Regarding your May 19, 2023, column titled “Homeowner ready to move and help the next generation” on The Mercury News and East Bay Times websites:

Question: We would like to move to Shasta County near our grandchildren. However, paying all that capital gains tax on our three-bedroom Silicon Valley home of 40 years is off-putting. How do we move without incurring all that capital gains tax? 

Answer: Real estate attorneys warn licensees to only advise on the buying and selling of homes. Full stop. Real estate attorneys remind consumers to seek tax and legal advice from the appropriate professionals. Older adults selling the family home can have a trifecta of protection via their real estate brokers, elder law attorneys and tax professionals. Conversely, the opposite is true. Older adults who avoid consultations with legal and tax experts to save time or money are engaging in financial missteps. Protecting your assets while improving your quality of life is well worth an in-depth dialogue with a complete team of specialists.

Many older adults sell homes in expensive ZIP codes, pay capital gains, purchase a replacement property (often closer to friends and family) and report: “We wish we had done it sooner.”

Let’s review real estate values in the three San Francisco Bay Area counties that are part of Silicon Valley. In April 2023, the California Association of Realtors reported the following:

Alameda County: The median price of a detached three-bedroom home was $949,000. The median time to sell a detached house was 11 days on the market.

Santa Clara County: The median price of a detached three-bedroom home was $1,500,000. The median time to sell a detached house was eight days on the market.

San Mateo County: The  median price of a detached three-bedroom house was $1,810,000. The median time to sell a detached home was 11 days on the market.

Now, let’s compare the median price of detached three-bedroom homes in April 2023, per the California Association of Realtors as a potential replacement property in Shasta County and its cities:

Shasta County                    $430,000

Anderson, CA            $375,000
Cottonwood, CA        $437,000
Redding, CA              $466,000
Shasta Lake, CA        $379,000
Shingletown, CA        $479,000

You’ll notice that in fewer than 100 days, you can sell your Silicon Valley home, purchase a Shasta County replacement property and fish at the shores of beautiful lakes and rivers with your grandchildren. Don’t wait. You can dramatically improve the quality of the third act of your life (in more ways than one). If you don’t, it’s not only your loss; it’s your grandchildren’s too.

For Housing Market Data in your area, visit Pat’s webpage for trends here. Do you have questions about home buying or selling? Full-service Realtor Pat Kapowich is a Certified Probate and Trust Specialist. He is based in his hometown of Sunnyvale, California. Office: 408-245-7700; Broker# 00979413 Pat@SiliconValleyBroker.com