New Tax? Not So Fast

Since the new health care bill became law, there's been some worry that there would be a new tax on home sales for everyone. Not quite. Only a very small percentage of the population would have to pay any kind of extra tax on a profit made from the sale of their home. The law only applies to those who make over $200,000 a year in income, or $250,000 combined for a couple filing together. Also, to have the tax apply to you, you would have to clear a $250,000 profit on the home sale, or $500,000 for a couple selling their home. So, an example of someone who would pay the 3.8% sales tax would be a couple whose combined income was $280,000. If they sold their million dollar home for a profit of $600,000, they would be taxed on $100,000 of the profit, or the amount that was over the half million dollar exclusion. Their total tax paid would be $3,800, plus any other previous taxes.

However, most home sellers would not have to worry about this tax. Half of all homes sold in March were sold for $170,000 or less, falling far short of the profit margin needed to generate any kind of sales tax. The bill takes effect in 2013 and will only hit the top-earning 2% of families, according to The Tax Foundation. So don't worry your heads about paying massive taxes on your home sales, you most likely won't get hit with any.