Health Law’s Heavy Impact
![pinocchio[1] Resize](http://www.johnsonteamrealestate.com/blog/wp-content/uploads/2010/04/pinocchio1-Resize.PNG "pinocchio[1] Resize")
The Spokesman Review recently came out with an article relative to the recent Health Care Plan in which they make the statement
Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one.
I know that many in our industry and clients as well took this to heart and were concerned about the implication for themselves, their friends and for the Country as a whole. The National Association of Realtors has come out with the following in response to this type of information.
Is The Rumor Fact or Fiction?
4/23/2010
A couple rumors are circulating that are causing unnecessary concern among our members (and here is a hint, both of these rumors are false)
.The new “Cap and Trade” Climate change bill in Congress requires a homeowner to license their home prior to selling itFICTION!
There is no requirement in the law to license a home before your clients are allowed to sell their home. In addition, there is not a requirement to make a home more energy efficient before it can be sold.
Rumor Number TwoThe recently-passed health care legislation imposes a 3.8% tax on homes sales.
FICTION!
An article has been circulating that mischaracterizes and overstates what is actually in the legislation. Here are the facts.
There is a new 3.8% Medicare tax for “High Income Filers” that goes into effect January 1, 2013 The tax is on unearned income and will apply ONLY to single filers with more than $200,000 of Adjusted Gross Income (AGI) and joint filers with more than AGI of $250,000. Unearned income includes interest, dividends, capital gains and net rents.
Keeping in mind the income limitations above, real estate income that will be affected for high-income filers include:
- Sale of a primary residence: If the gain from the sale of the property is below $250,000 (individual)/ $500,000 (couple) NO tax will have to be paid on the gain. The new Medicare tax would only apply to any gain realized over the $250K/$500K existing primary home exclusion that will bring the filers AGI over the $200K/$250K limits.
- Second Home/Investment property: The additional 3.8% tax will apply to the portion of the gain realized on the sale of a second home or investment property that will bring the filers AGI over the $200K/$250K limit.
- Rental Income: The portion of net rental income that exceeds the $200K/$250K AGI limits will be subject to the new 3.8% tax.
Not to pick on The Spokesman Review but it would appear that they would do better to get their facts straight before they go to publication rather than to spread this type of misleading information.
Rumor Number One
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Hope everyone had a great weekend! Every week we track the number of homes on the market that have offers on them and those that do not and create a ratio we call Pending Ratios.
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