“Principal residence” is a term used by mortgage companies, loans, FHA and IRS. This term refers to the house in which you live. If you are applying for a mortgage Second, funding a loan or open a credit to the house, you’ll probably find that the interest offered you is much more down to a house in which you live, and much higher for an income property. Selling a home can also affect the taxes you depending on whether your house is considered income or principal residence. When you sell a rental house, maybe you are liable to pay tax on your income made in the sale of your property. These taxes do not always apply to the sale of main home. Changing the rental property to your main home can save you a lot of money.
Ends with the lease with your tenants the rental property. You can do this by giving a notice of 30 days and keeping you with state law asking tenants to leave the house.
Move to the rental property. Lives in the house for two years before selling the house if you want to take advantage of the tax when you sell the primary residence. According to the website of the IRS, “You must meet the tests if you can show you have and live in a property as your main home for 24 full months or 730 days (365 x 2) over a period of five years ending on the day of the sale. ” Many mortgage companies see the year in residence as a requirement for the definition of main house.
Change all the utilities in your name and your home address. With the house being rented, the bank will require proof that you live in the house. Often utility bills such as electricity and gas bills, show your name and property address as the address of the account will prove that you live in the house.
Change the direction of the driving license and car registration with the department of motor cars in the state. This is a standard that the IRS uses to determine which property is your main home.
Register your vote with your new address. This is another criterion that determines the principal residence used by the IRS.