Did you know that under the new health care bill all real estate transactions are subject to a 3.8% "Sales" tax? You can thank, Nancy, Harry, Barack and (your local Congressman) for this.
If you sell your $400,000 home, this will be a $15,200 tax.
Remember Obama's battle cry, take from the workers and give to the drones.
So, let's see how much of this is true and how much of this is false. True, there is a new tax under Obamacare (the Affordable Care Act) that will impact some homeowners who sell their homes for large gains. However, it's not a sales tax. It's not even a real estate tax. It's an investment tax and it only applies if your gains are over a certain amount and your income is over a certain amount. Like a lot of the tax code, it's fairly complicated. But, let's look at a couple selling their home as an example. In the example above, any couple selling any home for $400,000 no matter how much they paid for it initially would not pay $15,200 for this tax. They'd pay $0, zip, zilch, nada.
The tax is on investment income and is for couples making more than $250,000/year if they file jointly. The tax is on the amount of investment income over $500,000 (for a couple). So, who would pay this tax and how much?
If a couple were making more than $250,000/year (a figure which excludes 97% of all U.S. households immediately) they might have to pay this tax. The first thing to keep in mind is this tax only potentially applies to the top 3% of income earners. Now, to have to pay the tax on the sale of a home, they'd have to net more than $500,000 from the sale. So, let's assume this couple makes more than $250,000 and bought their home for $300,000. They then sell it for $850,000. Their gain on the sale of the house is $550,000. So, they have to pay tax, not on the $850,000 sale price, not on the $550,000 gain but on the $50,000 gain over the $500,000 exclusion. They would pay 3.8% of $50,000 or $1,900. If you're making more than $250,000 as a couple and you anticipate selling your home for $500,000 or more above what you paid for it, look out. This could cost you a couple of thousand dollars on the sale of a home worth more than $500,000. Otherwise this particular tax will have no impact on you at all.