Everything you need to know about 1031 Exchange.

| March 9, 2020

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A 1031 exchange is used by savvy real estate investors to defer paying capital gains tax on the sale of an investment property. This is allowed by exchanging the first property for a second property the investor wishes to purchase. To put this in perspective, you would rolls the taxes of the sale of first property into the new property, deferring it until the sale of second property. Effective use of 1031 exchanges allows investors to leverage the proceeds of an investment property sale to build bigger real estate portfolios. Essentially, if you sold a building for $500,000, you would lose, say, $150,000 to taxes. With a 1031 exchange, you might be able to use the entire half a million dollars to purchase one or more properties. Normally, you would have $350,000 after paying taxes on a sale of your investment property which it would put a limit to potentially buy property in the future. By implementing a 1031 exchange, your purchasing power goes up almost 30%.  That sounds like a pretty good deal—and a deferred 1031 exchange is one way to potentially help you achieve it. We use 1031 exchange with majority of our real estate investors.  It's a great tax strategy for any real estate investor.

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Eden Brae Homes

For more than 18 years, Eden Brae Homes has been building dream homes for thousands of Australians. Our commitment to making home ownership a reality for families, first time buyers and property investors is as strong as ever. Every member of our team works together to make sure our customers’ dreams come true.

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