I’ve been getting this question from the left, and most definitely from the right, for the past several days now. I hear your concerns, and it is my intention to be your local and national real estate expert so, I figure it was definitely worth taking a closer look at the Patient Protection and Affordable Care Act, or more commonly referred to as… Obamacare.
Just this morning I had a meeting with CALIFORNIA ASSOCIATION OF REALTORS® Assistant General Counsel and Staff Vice President, Gov Hutchinson. Here is what he said: Among the various Senate Bills and new laws going into effect on January 1st, 2013 is infact a 3.8% surcharge that will be imposed on any commercial, investment, or income properties for individuals making over $200,000 and couples making over $250,000.
Does that mean if you sell your house after December 31st, 2012 you will be charged an additional 3.8% tax on the sale? NO. It means if you are a high income taxpayer and you make over $200,000 a year (or $250,000 as a couple) on the sale of your COMMERCIAL OR INCOME PROPERTY (not primary residence) then yes, you will be charged a 3.8% tax surcharge on the sale.
This does not pertain to just real estate. This is on ANY CAPITAL GAINS including money made from the stock market. On a side note, this tax increase is estimated to bring in $210 billion between 2013 and 2019.
As for capital gains made on the sale of your PRIMARY RESIDENCE, the first $500,000 in capital gains is TAX FREE. So, if you sell the house you live in, you will not be charged this tax unless you make over $500,000 on the sale. If you bought that house in last 6 years, I’m thinking you’re pretty safe. However, if you are still worried about this capital gains tax, and you think it may pertain to you, call me today to make an appointment 310-722-5959.
I WILL SELL YOUR PROPERTY for you BEFORE December 31st, 2012 and you can avoid the 3.8% tax. Problem solved.
To read more about the Affordable Care Act, here is the direct link to the entire law as it is written. http://www.healthcare.gov/law/full/