One disadvantage of refinancing a property instead of selling the property is that taxes have to be paid on funds received by additional borrowing,but no taxes would have to be paid if the property is sold.

Question

Quizplus · Accepted Answer

This statement is false. Taxes would also have to be paid if the property is sold, particularly capital gains tax if the property has appreciated in value. Refinancing does not trigger capital gains tax, but may result in additional property tax or mortgage interest deductions.

One Disadvantage of Refinancing a Property Instead of Selling the Property