You may have been hearing about an extra sales tax that will be placed on home sales starting in 2013. It was jammed inside the health care bill that takes effect in 2013 and will add 3.8% to all home sales starting next year. Is that true? Yes and no. I’ve been getting some calls on this, so I thought I’d address it en masse, as I’m sure it will pick up steam as we move toward the election.
You may have received an email within the last year with the subject line: “If you own a home, Please read this.” Aside from the improper capitalization, the subject line (which you can see below) refers to a huge tax burden on people trying to sell their house. Example from the email below: if you sell a house for $100,000 in 2013, you will get taxed $3,800. That’s not even close to being true.
Yes, there is a new 3.8% Medicare tax that is in place for 2013, but only applies in two instances: First, the sale of primary residences where an individual nets more than $250,000 on the sale. For a couple, it’s $500,000. (Good for you if you clear more than $500k on the sale of your primary residence. If I sell that house for you, I will absolutely contribute toward your extra tax burden. ) The second instance is when you sell an investment property for a profit. In which case, the entire gain is taxed. So, if you net $50,000 on the sale of an investment property in 2013, then you’ll pay an extra $1,900 on top of the capital gains tax. (In both cases, the 3.8% is on top of the normal capital gains tax.)
Here are a couple of links to peruse. The first one is from FactCheck.org that came shortly after the health bill was passed. The second one is from HomeOwnershipUniversity.com that came out a few weeks ago and directly addresses the email below.
To make a short story long, the email below – unauthored, you may note – is untrue. And, in my professional opinion, the National Association of Realtors is well aware that most homes sellers are more interested in a return of their investment vs. a return on their investment. Check with your tax professional to get up-to-the-dollar details on how this will impact a home sale this year v. next year.
THIS WILL BLOW YOU AWAY !!!!!
The National Association of REALTORS is all over this and working to get it repealed, before it takes effect. But, I am very pleased we aren’t the only ones who know about this ploy to steal billions from unsuspecting homeowners. How many REALTORS do you think will vote Democratic in 2012?
Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That’s $3,800 on a $100,000 home, etc. When did this happen? It’s in the health care bill and goes into effect in 2013.
Why 2013? Could it be to come to light AFTER the 2012 elections? So, this is “change you can believe in”? Under the new health care bill all real estate transactions will be subject to a 3.8% Sales Tax.
If you sell a $400,000 home, there will be a $15,200 tax.
This bill is set to screw the retiring generation who often downsize their homes. Does this make your November and 2012 vote more important?
Oh, you weren’t aware this was in the Obamacare bill? Guess what, you aren’t alone. There are more than a few members of Congress that aren’t aware of it either < http://www.gop.gov/blog/10/
I hope you forward this to every single person in your address book. VOTERS NEED TO KNOW.