Unless you’re a house flipper by trade, you don’t typically buy a house planning to sell it right away. When most people purchase a home, they anticipate spending many good years there—not least because mortgages are either for 15 or 30 years.

A home is the biggest purchase you’ll make, so it’s one to consider carefully and take seriously: you want to choose the right place to live for the foreseeable future. Still, as Charleston, South Carolina-based neighborhoods.com agent Lindsay Martin puts it, “life happens.”

The Magic Number  

The reasons for needing to sell soon after buying vary, Martin says. “It could be that someone’s family is growing and they suddenly have an urgent need for more space,” she says, “or it could be a job transfer, or needing to move back closer to family in a different part of the country.”

Just as the reasons vary, so too does the ideal amount of time you “should” live in a house before you sell it. Northern Virginia-based neighborhoods.com agent Cathy Howell says selling quickly is a complex scenario where you’ll have to consider if your lender has a minimum time period for your loan and the type of home you’re in: New builds tend to take longer to show a return on investment, Howell says.

“I’ve had clients purchase and resell a home within months, sometimes never having moved into it,” Howell says. “However, if they want to recoup their investment or make a profit, this would not be an ideal scenario.” 

For Raleigh, North Carolina-based neighborhoods.com agent Barbara Green, the question isn’t how long to wait, but why do you want to sell? 

“If your goal is to make a profit on the house, that would be one answer. In a new construction neighborhood, it’s pretty normal to expect that you won’t see any appreciation until the builder is out. In fact, a seller could lose money in the end if they compete head on with new construction. If your goal is to move to a different place to be with family or friends, it’s really important to understand that new market. It’s possible that market is rising faster than the one you’re currently in, so waiting to ‘break even’ on your current house could cause you to be priced out of the market you’re headed to.” 

Each scenario is unique and inherently personal. Still, many experts agree that if you have to move, you should plan to wait at least two years after purchasing if possible. Keep reading to find out two big reasons why two years is the magic number.

Why You Should Wait Two Years

You’ll avoid capital gains taxes

If you can wait at least two years to sell your home after buying it, the benefit is worth the wait, Martin says. For one thing, you no longer have to consider capital gains taxes for owner-occupied real estate.

If you’re selling your house after living in it for two years or more, $250,000 of your capital gains (money you make) from the sale of the home, or $500,000 if you’re married filing jointly, are excluded from taxable income, according to Investopedia. If you sell your principal residence before two years of ownership, any money you make on the sale is subject to being taxed in full. 

You’ll be more likely to recoup costs

“If you don’t allow more than two years between buying and selling, it’s unlikely you will net enough to turn a profit or break even,” Martin says. “Don’t expect to sell your home for the price you paid plus the cost of improvements you’ve made since living there—while these improvements can certainly help to sell your home more quickly, they will likely not recuperate the costs you incurred to add them.” 

If you began renovating your home straight after moving in and now need to sell, you might want to peruse the 2019 Cost Vs. Value Report. You can search for your specific zip code to see how specific projects affect resale value and what percentage of costs you’re likely to recoup. Remember, you also likely put down a lot of money at closing, so think about the time needed to recoup closing costs as well.

Life is short and ever-changing. It’s good to not be tied to a house in the event one chooses to move on.

Caveats to the Two-Year Rule

As mentioned, there are many variables that come into play, such as if you’ve purchased a home in a brand-new community where new construction is still occurring. There are other caveats to the rule, as well, says Richmond, Virginia-based neighborhoods.com agent Rick Perkins.

“Ask yourself, what is the market appreciation in the area? It might be growing at a strong enough rate to accelerate the [two-year timeframe], or it may take much longer if the market is either stagnant or on a down slope,” he says. Other things to consider include how many homes are currently on the market in your area and what the demand is for the particular price point you’re selling for, he says.

The Takeaway

Selling your home more quickly than anticipated — whatever the reason — can be a stressful financial consideration. While two years can help you avoid capital gains taxes and potentially recoup costs, it isn’t always possible to wait that long. 

“I tell my clients that we have to consider all factors,” Howell says. “What it will cost to stay vs. leave, for example, or if they are trying to purchase elsewhere, will holding on to the current property result in them paying more over time?” 

Ultimately, it’s important to remember a well-worn adage, Green says. “Life is short and ever-changing,” she says. “It’s good to not be tied to a house in the event one chooses to move on.”