To transfer residency after purchasing an older home in the United States, the buyer must first establish clear intent to reside in the property as their primary residence. This requires updating their address with the state Department of Motor Vehicles (DMV) and the Internal Revenue Service (IRS) within 30 days of purchase. Next, they should file a new tax return with the correct state and federal tax IDs, including Form 1040 and state-specific forms. If the home qualifies for a homestead exemption, the buyer must apply through the local assessor’s office, which varies by state. Finally, consulting a tax attorney or CPA is recommended to navigate complex state laws, especially in areas with historic designation or property tax caps.

Establishing residency is critical because it determines tax liability, as primary residences are taxed differently than investment properties. For example, federal capital gains taxes on the sale of a primary home are exempt if owned for at least two years (IRS Publication 501). However, state taxes vary widely; California and New York impose higher property taxes on older homes, while states like Texas and Florida offer partial exemptions. A 2022 study by the Tax Foundation found that homestead exemptions saved homeowners an average of $3,200 annually, with states like South Dakota and Alaska offering exemptions exceeding $10,000. Local zoning laws for older homes also impact residency, as historic districts may restrict modifications, potentially delaying permits and increasing costs. For instance, New York City’s Landmarks Preservation Commission enforces strict regulations, adding 6-12 months to renovation timelines (New York City Council, 2021). Proactive compliance with these steps ensures legal and financial clarity, avoiding penalties like prorated property taxes or1099-S forms for unclaimed exemptions.