Aug 09

Additional 3.8% Tax!

Or not!  Say what you will about the new health care law, it will not add ad additional 3.8% sales tax burden to the majority of home sales.  Brooks Jackson spells it out very clearly on FactCheck.org.  Among his comments:

…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.

By “profits” they mean how much you NET.  So you’d have to be single and have 100% equity in a home valued (on the market) at more than $250k, or $500k if you’re a married couple.  Or some percentage of equity in a home valued greater than that.

The example that’s been floating around claims that an “average, middle-class” person will pay an extra $15.2k on the sale of their $400 home.  While investment properties and second homes are more heavily taxed (and always have been, since they’re income &/or luxury properties by and large), most people will feel no change from this law. Nor will it make any problems for the majority of real estate markets.

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