Tax impact

This discussion explores the tax implications of selling a house purchased in December 2019, jointly with your father. The core question is whether you can sell this property now and purchase another without incurring significant tax liabilities. The advice centres on Section 54 of tax law, which allows for capital gains tax exemption when reinvesting in residential property, but with specific time limits for purchase or construction. Selling the house before holding it for the required period (typically 2-3 years depending on the exact sale date and tax rules) could result in short-term capital gains, negating the benefits of Section 54. However, if the house is sold at the original purchase price, no capital gain arises, thus avoiding short-term capital gains tax.