Wednesday, September 1, 2010

Debunking the 4% Home Sales Tax Myth

Some emails and reports are circulating the various media outlets announcing a 4% sales tax or transfer tax on real estate stemming from the new federal health care legislation.  I'm here to tell you that this information is FALSE.

Instead, what was included was a 3.8% Medicare tax for some high income households that have "net investment income".  Set to take effect January 1, 2013, this new tax applies to households with an Adjusted Gross Income of  more than $200,000 for individuals and more than $250,000 for couples.  When these limits are met, the new tax would only apply to any home sale gain realized in excess of the $250K/$500K existing primary home exclusion that pushes the filer's AGI over the $200K/$250K adjusted gross income limit.

Clear as mud, right?!  For more information, check out the NARs' Myth Busters Flyer.

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