I recently received this e mail, and I understand that it has been floating around for quite some time now.
“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. Just thought you should know.”
Well, not so fast, this email is misleading.
This 3.8% tax is an investment income tax, not a sales tax on all real estate transactions.
Only people earning $200,000 a year, individually, or $250,000 a year, as a couple are required to pay the tax. The bill should only affect “high earners”, who make up approximately 5% of the population.
An individual taxpayer would have to show a clear profit of more than $250,000 on their home sale. That means $250,000 more than the buyer paid for the home. And, the number goes up to a profit of more than $500,000 for a married couple. Again, this is on the profit of the home and not the sales price. It’s on the profit above and beyond the $250,000 or the $500,000.
So, if a married couple, considered high wage earners, earning over $250,000 a year, sell their home for a clear profit of $525,000. Then, they would be taxed 3.8% on $25,000, meaning a tax of $950.
For more details, read the full article.
I also looked it up on Snopes. Read the full article here.
Specializing in Residential, Investment and Relocation Real Estate.
Melbourne Real Estate / Palm Bay Real Estate
and the Surrounding Areas
I buy, sell, rent, own and manage Real Estate.