There have been about four months between now and when the United States Supreme Court first declared a national, constitutional right for LGBT couples to marry. Since that time, there have been a number of states which have moved forward on either adopting or adopting and expanding rights to same sex couples. As a result, LGBT couples now have many more rights when it comes to real property, something that gives them peace of mind and the ability to plan better for the future.
What to Know about Gay Marriage and Real Estate
However, prior to the ruling, and even now, there still remains a bit of uncertainty because state laws differ from state to state. Because each has its own sovereign jurisdiction, even states where gay friendly laws are a reality, there are still hurdles to clear. This isn’t all doom and gloom. In the wake of such a landmark decision by the highest court in the country, there are always hiccups. Obergefell v. Hodges concluded with the jurists deciding that same sex couples not only have the right to marry, but also, can tie the knot no matter where in the country they might reside.
“According to a recent survey by Better Homes and Gardens Real Estate and the National Association of Gay and Lesbian Real Estate Professionals, 81% of its nearly 1,800 LGBT respondents felt that “a ruling for marriage equality will make them feel more financially protected and confident.” That lack of confidence may help explain why LGBT homeownership rates lag those of America overall. According to the survey, 54% of LGBT respondents owned homes, compared with the national homeownership rate of 63.8% (which is itself at the lowest point since 1993).” —Realtor.com
Before this ruling, in states where same sex, married couples lived, but the states themselves had not recognized the lawful relationship, there were only two available options: joint rights of tenancy with survivorship, and, tenancy in common. Basically, these do not differ from, non-married, heterosexual couples, or even people who were not at all in a relationship. Joint rights of tenancy with survivorship means precisely that: when one of the two co-owners dies, the survivor is given full possession of the property. Tenancy in common is more of a legal partnership, as it gives 50 percent of the property to the survivor and the other 50 percent goes to the decedent’s heirs. Now, there are other options available when it comes to gay marriage and real estate, like the following:
- Tenancy by the entirety. With the ruling of the US Supreme Court, LGBT couples can not only legally marry in any state, but also, have access to title a property under tenancy by the entirety. This was previously only optional for married couples. Now, any legally married couple, LGBT or otherwise, can petition to re-title a property under tenancy by the entirety. While this is much like joint rights of tenancy, is has greater legal protections attached, which practically any couple might find useful. For instance, tenancy by the entirety offers greater protection from creditors.
- Capital gains exemption. The SCOTUS decision also gave same sex couples a new tax advantage — capital gains exemption. This is a huge benefit and relief from an unnecessary financial burden. By IRS rules, an individual that sells a property pays the capital gains rate on every dollar over $250,000. However, for married couples, that figure is doubled to $500,000 and the IRS has extended this important tax benefit since 2013.
- VA home loan equality. Prior to the Obergefell v. Hodges ruling, the VA had a policy of treating all qualified applicants the same, however, a law existed which deferred the agency to each individual state. In other words, though the VA had an equality practice, it had to recognize state law. That’s long gone and now same sex couples have access to this homeownership path.