I’ll bet you’ve had the big scary email about the alleged real estate sales tax at least once – maybe more. I know I have. The email usually begins by asking, “Did you know that Obama’s new health care bill will make all real estate transactions subject to a 3.8% sales tax? Just think, if you sell your home for $400,000, there will be $15,200 tax due.”

This is baloney!  Go to FactCheck.org or Snopes.com and get the facts. The National Association of Realtors (NAR) has put out a MythBusters commentary to quell the rumor-mongering but the email persists.  In the NAR’s commentary they quote The Oregonian who did a comprehensive study of the legislation and published their findings.  Here’s what they say:

This new tax applies only to households with Adjusted Gross Income (AGI) of more than $200,000 for individuals or more than $250,000 for married couples. Since capital gains are included in the definition of net investment income, an additional tax obligation might result from the sale of real property.

Even if the AGI limits are met, the new tax would not be applied to capital gains that result from the sale of a home, since the existing home sale capital gains exclusion rule still applies – $250,000 (individual)/$500,000 (couple). So if the gain from the sale of the primary residence is below that amount, then NO Medicare tax will have to be paid on the gain. The new Medicare tax would apply only to a home sale gain realized in excess of the $250K/$500K that pushes the filer’s AGI over the $200K/$250K income limits.

So the next time you receive an email screaming of the injustice of the new real estate sales tax,  don’t pass it on – just delete it.  Maybe you can calm the Sender by giving them a link to this website. It feels good to have the facts instead of the fears.

Remember, if you are ready to sell your home or if you’re in the market to buy a home, please give me a call at 402-670-8775 or email me at Marie.Otis@cbshome.com.