Our Need to Educate the Public

By
Real Estate Agent with Keller Williams Shore Properties 1005238

I recently received this email from a client:True False

"When does your home become part of your health care? After 2012!

Your vote counts big time in 2012, make sure you and all your friends and family know about this !
 
HOME SALES TAX
 
I thought you might find this interesting, -- maybe even SICKENING!
 
The National Association of Realtors is all over this and working to get it repealed, -- before it takes effect. But, I am very pleased we aren't the only ones who know about this ploy to steal billions from unsuspecting homeowners. How many realtors do you think will vote Democratic in 2012?
 
Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That's $3,800 on a $100,000 home, etc. When did this happen? It's in the health care bill, -- and it goes into effect in 2013. Why 2013? Could it be so that it doesn’t come to light until after the 2012 elections? So, this is ‘change you can believe in’?

Under the new health care bill all real estate transactions will be subject to a 3.8% sales tax.

If you sell a $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation, -- who often downsize their homes. Does this make your November, 2012 vote more important?

Oh, you weren't aware that this was in the ObamaCare bill? Guess what; you aren't alone! There are more than a few member s of Congress that weren't
aware of it either.
 
You can check this out for yourself at: http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home
I hope you forward this to every single person in your address book.

Voters need to know." (end of email)

The facts:

There is no "Obamacare" tax on most home sales.  The health law will impose a 3.8 percent tax on investment profits and other non-wage income starting in 2013. But that tax applies only to couples with adjusted gross income of $250,000 (or individuals with AGI of $200,000). About 95 percent of households make less than that, and will be exempt from the law no
matter what.

In addition, couples who sell a personal residence can exclude the first $500,000 in profit from tax ($250,000 for singles). That would be profit from a home sale, not proceeds. So a couple that bought a house for $100,000 and sold it for $599,000 would owe no tax, even under the health law.

If that couple had AGI in excess of $250,000 and made a profit of $500,010, it would owe the new tax. On ten bucks. That would be an extra 38 cents.

While we may not agree with the law, we DO NOT need more misinformation passed around that will hurt future home sales (and we all know that these emails can be circulated for years).

We, as Realtors, need to correct these errors and educate or clients.

 

 


Posted by

 

 609-553-7926

Find Your Dream Home on The Jersey Shore in Ocean County!

www.TheJerseyShoreHomeFinder.com

 

 Licensed in New Jersey.  Keller Williams Shore Properties 

770 Lighthouse Dr. Barnegat, NJ Phone: 732-797-9001

 

 

 

Comments (24)

Diane Daley
Caron's Gateway Real Estate - Northumberland, NH

I'm very aware a vocal about it...  Everyone needs to stomp they feet and say enough. Get out and vote is very important.

Jul 13, 2012 10:53 PM
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Under the new health care bill all real estate transactions will be subject to a 3.8% sales tax.

WRONG! TAX is ONLY on the profits OVER the capital gains threshold.....like the 1099 HOAX that had to be removed by Congress BECAUSE IT WAS ALREADY in the IRS regs, this is something that NAR needs to be working to REPEAL

NAR! SPEND our money where it counts!

Jul 13, 2012 10:55 PM
Daniel J. Brudnok, REALTOR
Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License #RS-225179-L / Delaware License #RS-0025038 - Downingtown, PA
SRES, e-PRO,ABR,GREEN,CSP

Hi Karl,

Our managing Broker has been sending emails to be sure we all know the truth......at least once a week he receives emails from an uninformed Agent and has to calm the waters.

Jul 13, 2012 10:55 PM
Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

wahoo! nothing like helping folks save even more on their home sale!

Jul 13, 2012 10:56 PM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Caron...just to be clear: There is NO health-care tax on the vast, overwhelming majority of home sales.

Jul 13, 2012 11:33 PM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Wallace, exactly the TAX is ONLY on the profits OVER the capital gains threshold...which is a PROFIT over $500,000 for a couple.

Jul 13, 2012 11:38 PM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Dan, that's a really good idea...knock down these rumors before Realtors give out false information.

Jul 13, 2012 11:38 PM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

As long as we can tax only the rich to provide a service for the poor, it is somehow OK. Still not right in my book for the following reasons:

1. It is not the role of the Federal government to provide health care. At the time of the Constitution, there were people who were sick, hungry, without horse, without education, without land or home, yet the founders never mentioned that the federal government had to provide for them. The purpose of the federal government was to provide protection for the states and to protect the individual liberty and freedom of the people. Even with their struggles with the slaves (as they knew the idea of personal liberty and freedom must apply to all humans) they didn't mention any assistance to provide deportation, education or assistance. Instead, they made provisions that will allow them the same protections of those who chose to immigrate to the states and fought the tyranny of a king.

2. The Federal government's involvement in the health care system might be the cause of costs we are experiencing now.

3. Instead of fixing the health care system, they are adding and/or extending the layer of federal government on top of it. Let's look at finding ways for people with pre-existing conditions to be able to afford health care, keep cost low, etc.

4. If Americans want to be taxed in order to provide a federal service, then the tax should be applied to ALL Americans, not just those who are wealthy.

 

just my 2 cents

Jul 14, 2012 07:16 AM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

What? This was about accuracy and not passing on false information, not the politics of the health-care reform bill.

Jul 14, 2012 08:46 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

My apologies as I didn't think your facts gave any positive credence to an extension or addition to another federally mandated health care plan.  Furthermore, based on your replies to other blogs, I thought you would be receptative to tangible commentary on such an inane concept. Again, my apologies for your lack of discourse. ;)

Jul 14, 2012 11:42 AM
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

The Taxpayer Relief Act of 1997 - signed into law by President Bill Clinton is probably the most significant change in recent times affecting real estate. This law simplified taxes for 99% of Homes sold in the U.S.

Since 1997 Home sellers are eligible to exclude up to $250,000 if single or up to $500,000 if married, of the capital gain on the sale of the residence.

Prior to the Taxpayer Relief Act of 1997, the previous tax reform signed into law by President Ronald Reagan allowed rollover that required reinvestment in a home of greater or equal value. The previous law also allowed a one-time capital gain exclusion of $125,000 for taxpayers over age 55 who sold their homes.

So an additional 3.8% tax above the $250/$500K cap gain exemption for those with incomes above $200K is still far less of a tax burden on real estate capital gains than prior to 1997.

Jul 14, 2012 12:27 PM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Satar, No MY apologies for not being clear on the purpose of the blog and for the snarky response, which was to inform, not debate the health-care reform act. The type of emails I mentioned can be a bane to the real estate market.  I wanted to disabuse people of the notion that sellers would be be taxed on a home sale, regardless of the situation, which is simply not true.

Mitchell, thank you for adding more clarity.

Jul 14, 2012 09:51 PM
Dale Terry
Yadkinville, NC

Let's all hope that a future Congress doesn't lower the threshold, it would seem a simple thing to do to get more money for the gov.

Jul 15, 2012 04:28 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Well, you can polish a turd any way you like, but in the end, it still looks and smells bad.

Jul 15, 2012 06:36 AM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

I would submit that with so many pages in the "bill," and agencies created to administer it, there is crap hidden all over the place that will not come out until it comes out!

But, a tax is a tax!  They never grow smaller or encompass fewer people as time goes on.  Expect to it capture more and more people as time goes on, with lower incomes and more than just "investment" properties.

Did you know Bush 41 eliminated the Spanish American War phone tax?  When started, few people had phones, so it affected few people.  But over time, well, it affected everyone!  And for how long???

Jul 15, 2012 06:39 AM
Karl Hess
Keller Williams Shore Properties - Barnegat, NJ
on The Jersey Shore

Wow people...I attempt to CORRECT an erroneous chain email that should be a concern to all real estate professionals and I get a bucketful of political vitriol in return. Can you not accept anything that won't put Obama in the most negative light, regardless of it's accuracy? 

You know what...never mind. Why don't all of you copy and paste the chain email at the beginning of the post and send it to all your clients and friends.  That should make you all feel better...

Jul 15, 2012 07:29 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Do some of these people even read the post?

Unreal.

Jul 15, 2012 07:31 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

@Jason - I know I do, but whether pink elephants pop out of your ass or not regarding a subject that you don't agree with, then it doesn't matter if the information is factual or not. In this case, it is even worse as there is a tax imposed (pink elephants do exists, just the rate of speed is in question!).

 

Jul 15, 2012 09:05 AM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Perhaps I wasn't clear Buddy, but I agree with you.  It is said that news agencies begin approaching the facts about the 4th or 5th production of the news story.  And when an agency gets ahold of a portion of it, as you say, and then run with it for their own ends, they do so for their own reasons.

My comment in 19 was the common sense view of a tax, any tax, and how pervasive it can be.

Jul 15, 2012 10:28 PM
Dale Terry
Yadkinville, NC

I agree with you Karl, I also think that Congress will not leave money on the table.  I expect the threshold to be reduced soon.

Jul 16, 2012 08:40 PM