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These state pages or hyper-local pages provide content directly related to a specific geographical location.
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Last Thursday (April 5, 2012,) approximately 600 REALTORS® descended on Hartford, CT for the annual REALTORS® at the Capitol day. The morning began with a general assembly session at the Bushnell auditorium, where CAR (Connecticut Association of REALTORS®) leaders presented the issues concerning some of the current proposed legislation and how it impacts the real estate market for agents, home buyers and sellers.
The gathering then moved across the street to the Legislation Office Building, where REALTORS® broke into smaller groups to meet with the State Senators and House Representatives that represent their specific regions. During the Q&A session that I attended, one of the legislators went a bit off topic and pronounced how burdensome the Federal Health Care Bill is, because it will tax sellers 3.8% on the sale of their homes, to fund the bill.
That blanket statement was immediately corrected by some of the attendees. However, it was troubling to realize that if an elected official had not made the effort to find out the details of the tax, how much more of the public was also misinformed. Therefore, although the mistatement has been debunked many times before, I thought it was worth clarifying the details of the tax provision, one more time.
Beginning in 2013, the 3.8% tax will apply to singles earning $200,000+ and married couples earning $250,000+. The tax is only on the profit, above $250,000 (singles) and $500,000 (married.) Therefore, the vast majority of home sellers are not affected by the tax, and that includes high income individuals.
For example, a married couple earning $800,000 (certainly high income and in the “subject to” category) sells their primary residence for $2 million. The profit on the sale of the home is $400,000. Amount subject to 3.8% tax = 0
Assuming their profit was $550,000, they would be allowed a $500,000 exclusion and would have to pay 3.8% on $50,000 or $1,900.
Author Bio: Marilyn Katz writes about real estate and Westport, CT. In her blog she highlights community amenities, events and activities and offers insight into the local real estate market. In her real estate practice she works with buyers, sellers and renters in Westport, CT and the surrounding communities.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.