A 3.8 Percent “Sales Tax” on Your Home?

This is a copy of an email that goes currently around panicking home sellers everywhere:

<start email> This should help stimulate the Real Estate market!

UNDER THE NEW HEALTH CARE BILL – DID YOU KNOW THAT ALL REAL ESTATE TRANSACTIONS ARE SUBJECT TO A 3.8% “SALES TAX”?

YOU CAN THANK NANCY, HARRY & BARACK (AND YOUR LOCAL CONGRESSMAN) FOR THIS ONE.

IF YOU SELL YOUR $400,000 HOME, THIS WILL BE A $15,200 TAX.

Verified

Higher taxes on real estate investments. The 3.8% Medicare surtax would hit average, middle-class investors in real estate. A middle-class taxpayer who happens to sell real estate for a gain in a particular year would be liable for this new tax, regardless of how low her income might be in other, more typical years.<end email>

 

 

Q: Does the new health care law impose a 3.8 percent tax on profits from selling your home like the above email states?

A: No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won’t be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few — those with high incomes from other sources.

Here is a link to an article that explains this misunderstood new law in detail and how and when it actually applies...

http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/

 

Phyllis Lerner, Realtor

Broker / Owner

http://westchester-real-estate.us
914-438-7556

Voted 2010/2011 FIVE STAR Real Estate Agent by Westchester Magazine