Is It True? Will The Residential Real Estate Be Taxed 3.8% As Part Of health Care Reform Bill?
Recently, a friend of mine mentioned that the new health care reform bill was going to contain a 3.8% sales tax on the sale of homes. I think I blurted out, "you've got to be kidding me!" Of course, I had to come home and investigate the details.
Health Care Reforms
Before I got to doing the research, I had all kinds of expletives circled nearby in my head. Thankfully, they stayed inside there. Other thoughts included; could our leaders in Washington authentically be that stupid? Hasn't the housing commerce already gone straight through adequate trauma? Why would Washington want to kill the real estate firm and therefore the economy?
My investigate did verify the new health care reform bill does in fact have a provision to fee 3.8% sales tax on the sale of homes, but there is much more to it than that though. The 3.8% real estate sales tax only applies to particular tax payers production more than 0,000 or joint taxer payers production more than 0,000 And you wouldn't pay on the first 0,00 in profits for a particular tax payer or 0,000 in profits for a joint tax payer.
Whew...I was worried there for a minute. All the residential real estate I own has dropped 40-50% in value so no need to worry about profits. For many us real estate types, it will be many years (if ever) before we work off carry forward losses from real estate activities of the last several years, so income thresholds aren't an issue either.
My friend made it sound like it was a straight dollar for dollar 3.8% sales tax, which would have been the single stupidest thing Washington could have done since the starting of the republic. I am never glad to hear Washington is tinkering with the market in which I earn my living, but I am glad to know that this 3.8% sales tax only applies to profits over 500k for joint filers. The 500K behalf threshold pretty much eliminates most home sales unless the homes are selling for millions of dollars, which is a very small percentage of homes.
I think the possible bigger issue may be commercial properties owners where buildings that cost millions of dollars could authentically appreciate a small percentage but growth in value 0K or 0K in net terms. The year you report the sale, your income would be increased by the net behalf from the sale of the building. For example, a retired join on a fixed income could sell a commercial property from a firm they once owned. Even though the join is on a relatively small fixed income, the sale of the building would trigger them into the 250K income class when the behalf of the sale exceeds 750K. Again, this might not happen that often, but one thing we know for sure...Washington put the provision in to raise revenues and that it will.
condition Care Reform Bill Levies 3.8% Tax on Sale of Residential Real Estate
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