Tuesday, March 13, 2012
NAR: Tax rumor keeps spreading
WASHINGTON – March 13, 2012 – Contrary to a viral email that seems to die out but then return with a vengeance, there is no across-the-board real estate tax starting in 2013.According to the National Association of Realtors® (NAR), there is a new real estate tax effective in 2013, but it will affect very few sellers – only people with a high annual income who turn a sizable profit on their home sale.
A 3.8 percent levy on certain investment income was included in healthcare legislation two years ago. Part of that investment income includes capital gains from home sales for individuals who make $200,000 per year or more, or married couples who earn at least $250,000. However, even these individuals won’t pay the tax unless the home sale earns them over $250,000 for an individual or $500,000 for married couples. And even if someone qualifies under these two conditions, a tax may still not be levied. Other tax details are considered before the 3.8 percent tax kicks in.
NAR recommends that Realtors become familiar with the tax, but they avoid coaching their clients because the tax details are complicated. The actual tax due will vary from individual to individual because the elements used to calculate “adjusted gross income” differ from taxpayer to taxpayer.
NAR has published a brochure on how the tax works, which is now available online. Download the 3.8% tax brochure (PDF).
© 2012 Florida Realtors®