I read a recent article from the Governmental Affairs Group of the National Association of Realtors and thought I would share what they were saying. The article was centered around one question: “Will the Health Insurance Reform Law Impose a 3.8% Tax on Home Sales?”
As reported by the Government Affairs Group, there is speculation that “the health insurance reform law contains a provision for a sales tax on homes.” Below are the facts as reported by the NAR Government Affairs update:
“Beginning in 2013, the health insurance reform law will impose a 3.8 percent tax on unearned net investment income, which includes some (but not all) income from interest, dividends, rents (less expenses), and capital gains (less capital losses). The tax falls on only those individuals with an adjusted gross income above $200,000 for single filers or $250,000 for couples filing jointly.
The tax will not be imposed on all real estate transactions.” It is difficult to “… understand the interplay between the health insurance reform law and existing real estate tax law. The exemption for the first $500,000 of capital gain from the sale of a principal residence remains intact and is not impacted by the new law.”
Because the tax is very complicated, the National Association of REALTORS® has prepared an informational brochure outlining several scenarios that could be relevant. You may also want to review NAR’s list of frequently asked questions about the health insurance reform law and the 3.8 percent tax on unearned investment income.
If you have additional questions see your local financial advisor.