New “Tax” on Real Estate Sales ?

There is indeed a tax on the sale of real estate.  It doesn’t apply to many people, but it WILL apply to some people that have profit from the sale of their homes. Starting in 2013, those with incomes over $200,000 will have to pay a 3.8% tax on profit from the sale of their primary residence or investment properties.  The exact amount will be based on a formula that includes the profit from the property and the income above $200,000.  The tax is not an income tax, but rather it is a “payroll tax”… officially it is a Medicare Tax.

It does not just apply to real estate, but also applies to investment income and dividends.


It will drive another nail into the luxury real estate market.  It has been in the doldrums for a while.  Adding new taxes will not get it going again.  And if you are thinking that this only affects ‘the wealthy’, think again.  Those homes are not built by ‘the wealthy’.  Those homes are not renovated by ‘the wealthy’.  Those consumers are more likely to hire contractors to do improvements.  And they are more likely to update more often…  They are a driver in the housing sector.  This added tax is NOT putting gas in the tank…

REO bargain hunting ? READ THE FINE PRINT

  • Some interesting posts I’m passing along
  • “…REO addendum are very extensive and put a lot of responsibilities and costs on the buyer
  • “…I’ve sold quite a number of REO’s to buyer clients. Prior to showing these properties I explain that if an offer is written, the bank will send us back their addenda, which will essentially be their new contract, weighted to the seller.  I also add that these bargain properties, are bargain priced for a reason and the sellers are removing any current and/or future liability once these properties are sold. I advise buyers in writing to review the offer AND addenda and  let them know that these addenda evolve with each sale meaning the sellers are updating the addenda to prevent a problem that occurred with their last deal.