Many homeowners and investors consider holding real estate long-term as a way to defer or reduce taxes, but the right decision depends on your overall financial picture, not just the tax implications.

In San Diego, I work with clients who are often weighing whether to sell, hold, or reposition a property after years of ownership or after having moved through probate. While holding can offer advantages like deferring capital gains, it’s not always the best move, particularly for heirs who will get to take a step-up in tax basis, and who may not have the wherewithal to take the property on as a rental.

There are other factors to consider, especially for those who have inherited the properties:

• Ongoing maintenance and carrying costs
• Is the home sitting vacant and vulnerable to squatters?
• Current market conditions
• Your long-term financial goals
• Whether the property is still the right fit for your situation

In many cases, the conversation isn’t just about taxes; it’s multi-faceted and about the overall outcome. I always encourage clients to look at the full picture and make decisions based on what positions them best financially, not just what minimizes taxes in the short term.

I recently shared my perspective on this topic in a national article with Realtor dot com, and it’s a conversation I’m having more often with clients navigating long-term real estate decisions in today’s market.