5 Great Places to Buy a Second Home

So, you’re dipping your toe into the waters of second home ownership. Exciting, isn’t it? You may already have an idea where you want to be, a seaside retreat just hours from your current home, or a pied-à-terre near the grandkids.

Florida 

No, we aren’t trying to sell you any swampland. The warm climate and promises of fresh citrus fruit aren’t the only reason Florida is a popular choice for second homeowners. If you plan to turn your second home into your permanent home, or if you are splitting time and can establish residency in Florida, you will pay no state income tax or state personal inheritance tax, because Florida doesn’t collect them. If you’d like to take advantage of this benefit, you will need to make sure you stay in your Florida home at least half the year.

Augusta, Georgia 

The median price of homes sold in Augusta was $85,800 (as of February, 2015), much lower than many popular vacation and retirement areas. The town is beautiful, full of southern charm, with nice weather to match, but the real reason to buy here is the Masters Golf Tournament. Not a golf enthusiast? Don’t worry, you probably won’t be able to get tickets. But what you can do is get out of town during the tournament and rent your house for what many consider a small fortune. Thanks to what’s known as the “Masters Exemption,” you can rent your home for 14 days or less each year without owing any taxes on that income to the federal government. The thousands you might make renting your home out for just a few days could offset the cost of improvements to your home, or a few days at an upscale island resort during the Masters.

Scottsdale, Arizona

Are you a social butterfly who prefers city life and the company of people your own age? If you’re buying a second home with an eye to retirement, Scottsdale could be a good choice because, among places with 100,000 or more total population, it had the highest percentage of people 65 and older in 2010. This could be a great start to an active social life, especially given popular annual events like the Scottsdale Culinary Festival and the nearby Phoenix Open. Added bonus: There is no tax on social security income in Arizona. Residents also avoid estate and inheritance tax.

Whitefish, Montana

Avid skiers will love being near the slopes in this small town near Glacier National Park. Rental vacancy rates are fairly low, so you have a good chance of being able to rent your place to vacationers to offset your costs when you aren’t there. And there’s more to Whitefish than skiing. The area is great for people who love to be active all year round, with plenty of available activities, including hiking, golf, yoga, and fishing. Glacier National Park, where visitors can camp, fish, hike, ride horses, and participate in many other outdoor activities, is open all year.

Upstate New York

Thanks to rising costs of housing in the city, plenty of city dwellers rent their primary home, and buy their second in towns like Millerton, Hudson, and West Kill. Much of the upstate is easy to reach from New York City, which makes it the perfect place to escape the hustle and bustle of the city. Beware the tax consequences of owning a second home in New York, though, if your primary residence is in another state. As long as you don’t stay there more than 183 days in a year, you should be okay.