Financial & Tax Considerations for Purchasing Lakefront Homes

Financial Planning for Lake HomesIf you’re considering purchasing a Lakefront property in New England, these financial and tax tips will help guide you in the right direction:






  • Those who have a clear understanding of what their retirement income vs. their pre-retirement income will be are likely to make a purchase that they can grow old with. Thus not having to worry about affording their dream lake property after they stop working.
  •  Income Taxes vary widely throughout the 6 New England States: CT, ME, NH, MA, RI & VT.  They range between a low of 3% in CT for low incomes to a high of 8.95% in VT for incomes above $450k.
  • New England State Sales Tax – range from a low of 5.5% in Maine to a high of 7% in RI.
  • New Hampshire has no state income tax or state sales tax, but makes up for it with higher than average Real Estate Taxes.
  • New Hampshire is also the only New England state without an estate (inheritance) tax.
  • With today’s low interest rate environment it is very common for 2nd home buyers to finance their 2nd home through a refinance on a primary residence. The reason for this is that your primary home receives lower interest rates for a 1st mortgage than on a 2nd residence mortgage.
  • The Federal Mortgage Interest Deduction applies to your first (2) personal residences.
  • When relocating to a new area – take the time to familiarize yourself with local use fees, i.e. (lake associations, land leases, dock fees, etc.)
  • If you rent your home out for fewer than 15 days per year, you do not have to report the rental income on your federal tax return.
  • If you rent the home for 15 days or greater, then your rental income is taxable. Rental expenses are deductible however the amount is determined by how many days rented in relation to the days lived in personally. See IRA Publication 527.
  • Managing overall Wealth including purchasing (a lakefront home) involves having a greater long-term financial strategy and thus peace of mind with any major financial decision.

For more information on your personal situation, please contact Certified Financial Planner:

Data Provided by Christopher A. Lund, MBA, CFP®, AIF®, President, Lund Financial Group, T (508) 316-1949, F (508) 316-3538,,“Your Dreams, Our Coordinated Strategies”

Posted by: Scott Freerksen “The Lake Guy”

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