Breathe easy, home sellers: Scary e-mails being circulated that warn all home sales will be slapped with a 3.8-percent sales tax -- $15,200 on the sale of a $400,000 home, one version of the rumor says – are not accurate.
A 3.8-percent tax will be imposed in 2013 on some investment income, and that can include income from the sale of real estate. But it only applies to individuals with an annual adjusted gross income of $200,000, or $250,000 for couples filing jointly, and only the investment income amount or the excess of income over the $200,000 or $250,000 amount will be subject to the tax -- whichever is less. So you’d need to meet the income requirements and make a profit on the sale of your home in order to have this tax imposed on it.
The National Association of Realtors has published a brochure for Realtors, outlining how the tax will affect their clients. In one scenario from the brochure, a couple with a combined salary of $325,000 sells a home for $525,000, producing a capital gain of $25,000. The 3.8 percent tax on that $25,000 is $950.
“Most people who are selling a home right now don’t have that much gain,” explains Mollie Grossman of Prudential Douglas Elliman Real Estate. “If they bought it for $500,000 and are selling for less than what they paid, it’s not a gain.”
The tax, which can apply to income from interest, dividends, rents (less expenses) and capital gains (less capital losses), is intended to fund President Barack Obama’s health care and Medicare overhauls, the brochure says.