Aug 16, 2012

The Truth about the new Real Estate Tax

There are some wild claims going around about the new real estate tax that takes effect in 2013. The rumors are a combination true and false information.

Under the new health care bill, there will be a 3.8% sales tax on profits over the capital gains threshold ( not on all home sales).

The stories circulating online are: "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."

In reality: The tax EXCLUDES the first $250,000 in profit from the sale of a personal residence, or the first $500,000 in the case of a married couple.


So if a couple paid $400,000 for their home and they sell it for $900,000 – they don’t pay this tax. It is only on the profits and only on profits over $250,000 or $500,000. Plus – you must have an annual income of more than $200,000 ( or $250,000 for a married couple).

Sure, none of us likes more taxes, even for health care. But at least you have the real story. 

8 comments:

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