Mythbusting, VAR style: There is no new real estate tax

For whatever reason, some people are spreading a rumor that there’s some sort of new real estate tax in the recently-passed healthcare bill.

So let’s be clear: It ain’t so. There is no new real estate tax, nor transfer tax, nor anything of the sort. Got it?

Where did this come from? The healthcare bill includes a 3.8% Medicare tax on “net investment income” (read:capital gains) for high income households.

So if you earn more than $200,000 per year ($250,000 if you’re married), and if you sold a house for a profit of more than $250,000, then the tax would apply to you. (Once again, that’s a quarter million bucks profit, not sale price.)

In other words, there are theoretically people out there for whom this applies, but how many folks do you know earning $250,000 profit on a home sale these days?

Want more detail? NAR’s all over that with a Web site dedicated to the healthcare bill. Check it out.

 

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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3 Responses to Mythbusting, VAR style: There is no new real estate tax

  1. I think your statements here are a little misleading. There is indeed a new tax, and in essence it is a tax on real estate profits, the fact that it only impacts higher tax brackets and higher profits doesn’t mean it doesn’t exist. Our members need to be able to advise their weathier clients to check with their tax advisors. So it is not fair to say “It ain’t so”.

  2. Nancy Calderon says:

    Correct me if I am wrong, but didnt this tax already exist. Wasnt the law that, there was no capital gains tax on house sales until it was over 250k, and that it got gradually phased out as your income increased. Something like that, I am a little fuzzy on it since I have had no clients who ever actually had that big a profit. But anyways, it does not really sound like a new tax, more like a reworking of an existing law and perhaps a different distribution of its proceeds to Medicare as opposed to a general tax fund.

    Feel free to clarify, I will be doing some research myself.

  3. This is not Capital Gains. This is over and above Capital Gains. It is a new tax.

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