Is there REALLY a 3.8% Tax on Home Sales?
Yes and no. There are a lot of misleading emails that make you think every seller will have to pay an additional tax when they sell their house. Yes, there is a new federal 3.8% sales tax on real estate to pay for the Affordable Care Act. It was passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund health care and Medicare overhaul plans. The reality is, only a small percent will end up paying, starting in 2013. It applies to those with incomes over $200,000 ($250,000 if married, filing jointly). Even then, the tax doesn’t apply to the first $250,000 (or $500,000 if married, filing jointly) on PROFITS from the sale of a personal residence. This exclusion doesn’t work for vacation homes or rental properties. It’s possible that investment income could be generated by the sale of real estate. But it’s quite a stretch to call it a real estate tax.
Contact me and I’ll be glad to email you a PDF document from the National Association of REALTORS® explaining this tax. Please check with your accountant for the most accurate and up-to-date information.
Donna Forest, Broker Associate, 603-526-4116