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I just read about the 3.8% real estate sales tax/transfer tax, written into the ACA (Obamacare) -- one of the many taxes that we'll be burdened with to fund Medicare and Obamacare.
I understand that it's not applicable to the sale of your primary home. Is that correct? Also, will sellers now have to increase their sales price by 3.8% to fund this, or do you think agents will agree to split the cost? I'm just thinking that for many sellers who are already taking a bath on their home sale, this could be an additional burden. As well, I understand that the tax is applicable in some instances to rental income. Is that correct?
It seems to me that this will be a big burden on the real estate market. Am I misreading it? Acknowledging that it's applicable to those with AGI of 200/250k, that's still a very large group of people....
The tax does not apply to a principal residence unless you have a PROFIT of 250,000 if single or 500K if married filing jointly. What is a profit on a home, LOL? It would apply to a second home as does capital gains now. But, as you say, it only applies to those who make over 250K jointly which is about 3% of us. Very few people would be subject to this tax. It will have no impact on typical home sales.
Lots of misinformation spread about it, but As Ponderosa said, no impact for the vast majority of home owners. It is not directly a real estate tax at all. It is an investment income tax which may apply to certain real estate transactions.
I would strongly disagree, every tax has an impact.
This has been proven time and time again.
A perfect example is that everytime there is a cut in the capital gains tax for the so called wealthy it has increased the amount of money going to the treasury...every single time.
Any extra tax, fee or other wise unwise regulation on the housing industry before it even has a chance to recover is just flat out dumb.
It is a investment income gains tax, not a real estate tax. It would apply to rental income less expenses if your AGI is over $250K joint. Even then it is not straight forward as it would apply to the lesser of the amount that your rental income pushed you over the 250K or the rental income.
There are numerous internet sites that explain the tax and debunk the misinformation that has been circulated by the opponents of ACA.
A perfect example is that everytime there is a cut in the capital gains tax for the so called wealthy it has increased the amount of money going to the treasury...every single time.
It is a timing issue. In the short term, more tax revenue flows into the treasury as people cash out investments at what they believe are temporary lower tax rates. If you analyze it over a longer period of time, the total tax revenues are lower due to the decrease in rates.
Saying that tax cuts increase tax revenue is true only if you are looking at it in the very short term.
It is a timing issue. In the short term, more tax revenue flows into the treasury as people cash out investments at what they believe are temporary lower tax rates. If you analyze it over a longer period of time, the total tax revenues are lower due to the decrease in rates.
Saying that tax cuts increase tax revenue is true only if you are looking at it in the very short term.
Thanks for the explanation.
Nobody should be paying capital gains tax anyway (since the money has been taxed when you earned it). And even if you tax it, the corresponding capital loss tax deduction should have been equal (and not limited to 3000 a year).
However, it should not matter whether you are wealthy or poor. To either target or benefit the wealthy is just wrong.
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Thanks for the explanation.
