Q. Yvonne, a friend told me that Obamacare has a hidden tax on real estate sales that goes into effect after the election. Is this true?
A. There is a provision in the Obamacare bill which begins in 2013 that requires an additional 3.8% tax for those homeowners who have a capital gain of over $500,000 (couple) or $250,000 (individual). If someone were to sell their home and receive over $500,000 in profit from the sale, they would be required to pay not just the Capital Gains tax but also a 3.8% Medicare tax. This tax would not be 3.8% of the whole amount, just the amount that is over $500,000 (or $250,000 for an individual).
Would this extra Medicare tax effect most Americans? Certainly not in this particular real estate market. However, it is important to understand that once a bill like this is in effect it is much easier to simply change the amounts. In addition, if there were ever a time that the Capital Gains limit is lowered it would effect this hidden bill.
While it is very important to keep tabs on what is happening at the Federal level, it is even more critical to watch the local government bills. Did you know that in 2007 a NC Bill was passed that allowed each county to enact real estate transfer taxes? It took four years (April 2011) for the NC voters to repeal this authority.
So, the long answer to your question is – Yes, we need to watch the government like a hawk because it is very easy for a bill to be passed (locally and federally) that directly effects real estate transactions.
And, yes, the Obamacare bill does have a real estate component that can effect homeowners with a very large amount of equity.
To search all the homes currently for sale in the Triangle area, go to:
http://www.BestRaleighListings.com or http://www.RaleighBargainHomes.com