Not sure if you heard or not, but there's a new tax in town. Actually, it's nationwide. It's called a "3.8% Real Estate Tax," but like a lot of taxes, there's a slightly different meaning to it.
My good friend Samantha Smith in Texas wrote this blog. You can check her out at SamIAmHouses.com.
Let me know if you have any questions!
What ... there's a "3.8% Real Estate Tax" that came into effect January 2013!?!
Yes, there is a new tax that is being tacked onto Real Estate transactions (sales), but it's really an Investment Income Tax and known as the 3.8% Medicare Tax.
You see, when you sell your home, it's possible that you might have this extra tax, but NOT ALL Real Estate sales will have this tax. In a nutshell, the 3.8% Medicare Tax is a tax on Investment Income, an income which is derived from the sale of the property. This tax will only be on transactions where the person selling the home EARNS more than the amount on the transaction AND the individual has an INCOME above $200,000 or couples who jointly have an income above $250,000.
Most likely, the sale of your principal residence won't be subject to the 3.8% Medicare Tax. However, it is always best to consult with a tax advisor to see if this 3.8% Medicare Tax will apply to you.Here's 2 great PDF Pamphlets that the National Association of Realtor has created about the 3.8% Medicare Tax"Top 10 Things You Need to Know About the 3.8% Tax" and "The 3.8% Tax Real Estate Scenarios & Examples"In additon, here's an informative video from the National Assocation of Realtor's Director of Tax Policy, Linda Goold.
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