True or False: There is a new 3.8% sales tax to be charged on all home sales. If you sell a $500,000 home, this tax will equate to $19,000.
THIS IS FALSE!
HOWEVER, THERE IS A NEW TAX BEING IMPOSED... it is more along the lines of a "capital gains" tax.
This investment sales tax of 3.8% will be implemented starting January 2013 and it will effect a small percentage of home sellers. This is how it will work:
- Single tax payers earning more than $200,000 will pay a 3.8% property sales tax on "profits" over $250,000.
- Joint tax payers earning more than $250,000 combined will pay a 3.8% sales tax on "profits over $500,000.
If you make the $400,000 profit, you will only pay after the first $250,000 profits. Taxes will be paid on $150,000 of the profit which was $400,000 minus $250,000. New Tax = 3.8% of $150,000, which equals $5,700.
In this same scenario, let's say you are a couple filing jointly and earning more than $250,000 combined. In this case, your tax would be zero. This is because taxes would only be paid after $500,000 of profits.
Please feel free to pass this info along. Let's help clean up the rumors.
Lisa
Posts
I doubt that the roomers are a problem, but rumors might be.
ReplyDeleteWill this replace the existing capital gains tax?
Will what one has spent improving/expanding the buildings be deducted, as it is now?
Houses don't appreciate; what rises in value is the land on which they sit, and it rises for reasons which have nothing to do with the owner of the land, and everything to do with the community as a whole. So letting the land owner keep the first $250,000 or $500,000, and pay back to the commons a mere 3.8% of any amount over that seems VERY VERY generous of us.
I'd rather pay a tax in proportion to my land value than on my wages or my purchases.
Old idea, and very just, logical and efficient.
Hi Ivtfan,
ReplyDeleteThank you for your comments. You are right to infer that the new federal sales tax does not replace the capital gains tax.
The concept of appraisals is an interesting one as depending on the type of property being evaluated, the analysis is specific. Here in Miami and Coral Gables, older historic single family residences have value and are treasured, while on the same token commercial buildings definitely "depreciate" with age and are treated as such. I suppose everyone has their own opinion, and that is all an appraisal is, an opinion of value.