I received an email from an associate that said part of the Obama health care package includes a 3+% excise tax on all home sales when the bill kicks in around 2013.
On a $400K house that would be between $12 & $15K!
Most of our elected officials have claimed to have never read the whole bill. Neither have I.
Can someone either substantiate this information, or kill the rumor?
It's partially true but does not apply to every sale. You can google it and find lots of info. Here is a bit of info I copied for you:
FULL ANSWER
We've been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false.
The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won't apply to the first $250,000 on profits from the sale of a personal residence - or to the first $500,000 in the case of a married couple selling their home.
Cynthia, thanks for the clarification.
Just for further clarification: are you saying $200K net proceedsfor a single owner - or $200K over loan amount ?(pre-closing costs.)
Based on your information, it sounds like an additional "capital gains tax". So if you make over $200K ($250 if married) and you make a "net" of 100K on the sale of your home, you would then be subject to a an additional $3,800 expense.
As far as it goes with a "tiny percentage of home owners", one would assume that those individuals making over the minimum amount are generally selling a higher priced home than those who make less than $200K
I'm disappointed that NAR wasn't all over this.
Am I on the right track?
I would argue with the assertion that individuals who make $200k and up are high earners; you would think legislators who are inside the Beltway would know that in their own backyard, that's not considered a high earner. And there are many other high cost of living areas where this is also true.
It is an additional capital gains tax but wrapped up in the typical political-speak that it only applies to the "rich" who make a big profit which is now a dirty word among certain folks.
The tax applies after the $250k/single or $500k/married deduction has been applied. This is a very simplified example (and take it with a grain of salt b/c this is just my understanding)
You sell a house for $1,000,000; you paid $400,000 for it 20 years ago, so you made a $600,000 profit. You are single, so you deduct $250,000 (if you were married, you would deduct $500k) from the $600,000, leaving $350,000 on which you will pay the additional tax - provided you hit the "high income" bracket.
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