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Does the Obama Health Care Plan include a Real Estate Sales Tax?

Real Estate Agent with Exit Real Estate

Does the Obama Health Care Plan include a Real Estate Sales Tax?

 There have been quite a few stories, emails and social media posts in circulation on this topic. Although everyone is entitled to their opinion about the Obama heath care plan, the story being promoted about a new real estate sales tax is misleading and inaccurate.

Here's an excerpt from a recent email that is circulating:

Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? When did this happen? It's in the health care bill. Just thought you should know. So, this is "change you can believe in"? Under the new health care bill - did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes.

Here's the truth. One of the provisions of the new health care legislation calls for high-income households to be subject to a new 3.8% Medicare tax on investment income starting in 2013. This has been frequently misreported as amounting to a 3.8% "sales tax" on all real estate transactions.

So who exactly would be subject to paying this tax? If you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the 3.8% tax on any gain realized above and beyond this threshold.

This is not a new tax on every home sale, and very few home sellers will be impacted by it. The tax is targeted at "high earners".  You are allowed a net profit $250,000 as an individual or $500,000 as a couple when you sell your primary residence. The tax would only apply to any profit realized beyond those amounts.

Darla and LeRoy Pilant are real estate brokers in Spokane, WA. Connect with them at TheRealEstateAces.com or SpokaneHomesforHeroes.com

Jeri Cranney

Well stated and factual.  Thank you.  I passed this on to some of my clients. 

Feb 17, 2011 10:47 AM
nan siegel


As a retired teacher I am in no way "high income", but having bought my home in 1977 in California it would now sell for way beyond the $250,000 ceiling.  How does one put a better spin on this?  I am receiving this from Democrats ...  


Feb 08, 2012 05:04 AM
Brian Schulte
Allison James Estates & Homes - Sierra Vista, AZ
SFR, Sierra Vista, AZ

This looky no good for consumers.  The GOOD NEWS is in reading the entire article and the bill part that pertains to this.

It still can is another OBAMA TAX

Mar 03, 2012 02:30 AM
Charles Stallions Property Manager
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

When you look at what the true tax rate is we in Florida pay 93 cents of every dollar earned on some kind of government entity whether they call it a tax or not if it takes money from my pocket without me agreeing it is a TAX.

I don't mind paying taxes but when you look at the waste that is our government then I say NO TAXES PERIOD.

May 06, 2012 10:58 AM