As we slide quickly into the bottom half of the year, many home owners have been questioning just what this new 3.8 percent home sales tax that comes as part of healthcare reforms will mean. The answer: not much. The fact is that only a few home sellers will be subject to this tax, which takes effect in 2013.
Under the new tax law, only those who meet a minimum income requirement ($200,000 per year for individuals and $250,000 for married couples filing jointly) pay the sales tax. Further, the tax does not apply to the first $250k on profits from the sale of your personal residence for an individual ($500k for married couples). So for the average – and even the well above-average – home sale, there is little to worry about. According to the National Association of Realtors, half of all existing homes sold for $189,400 or less in June, since none of those sales could possibly generate a $250,000 profit, none would be subject to the tax.
So who pays? For the couple making $260,000 a year, a sale of a $850,000 home that nets them $550,000 in profit only results in a 3.8% tax on the $50,000 amount over the $500,000 exemption. This means that in addition to the standard capital gains tax, this couple would pay an additional $1,900 as part of the health care tax. For the jetsetter executive who makes $300,000 per year and sells his $475,000 vacation home for a $75,000 profit, the tax amounts to $2850. Thus, the healthcare tax isn’t going to apply to most of us. However, this does not apply to second homes or investment properties so it is something to factor in as you prepare to buy a home for these purposes.
Contact NC Mountain Realty Group’s Lisa Grefe at (828) 337-6300 or email me we have specialists focused on Asheville, NC foreclosure and short sale properties, golf communities, luxury homes, downtown condos and even small cabins in the woods.
Original Content By SMITH LIVING...™
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