I can’t tell you how many times I’ve had people tell me this over the past few months, scared sellers telling me that there is going to be a 3.8% tax on the sale of their house in 2012 to pay for the health care bill.
I thought to myself the first time, “Now that would be stupid…” I know a lot of sellers who cant sell their house and pay off their mortgages, let alone pay an additional 3.8% tax to pay for a health care bill.
I decided to do some research, since I was noticing a pretty heavy theme among some of my sellers and seller leads.
Not wanting to read the mountain of Health Care legislation, I started with the path of least resistance, as my Friend Jeremy (who I will say, has a brain like a scientist) would say… your “Critical Path” (citing fancy engineering terms).
My search lead me to Snopes. I use snopes.com EVERY time I get a forward saying the world is going to end, or that someone needs money because they are stranded, or a baby got hold of a nail gun [look them up, they all exist on snopes.com]. Snopes does a good job of cutting through the hype and finding the truth. They did just that with this 3.8% property tax rumor.
Snopes said (verify on their site), that the rumor is partially true. YES, there is a 3.8% tax on profits OVER THE CAPITAL GAINS THRESHOLD, but no tax on ALL home sales. I’m not a tax accountant or tax attorney, but there are profit limits for capital gains, when you exceed those limits ($250,000 profit for taxpayers filing a joint return) you may be subject to the 3.8% tax.
Simply put: As long as you do not make more than the capital gains allowable (as 99% of all sales do), you will not pay the 3.8% tax.
Photo Credit: Soukup