In recent months any owners of Virginia Beach VA real estate have received viral emails warning of an across-the-board tax on all home sales in 2013. Basically the message ominously states that all real estate sales will be subject to a 3.8% federal tax and often warns of a $15,000 tax on a house selling for $400,000.
While much of the emails are politically motivated and some simply the result of misunderstanding the Health Care and Education Reconciliation Act, which President Obama signed into law on March 30, 2010, the result has been fear and confusion on the part of owners of Virginia Beach VA real estate who may be planning to sell their property in the future.
- 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. NAR has published a brochure explaining how the tax works on your Virginia Beach VA real estate.Click here to download.
- Section 1402 of the Act, titled “Unearned Income Medicare Contribution,” does impose a 3.8 percent tax on profits from the sale of real estate – residential or investment beginning in 2013. However, the tax is aimed at high-income earners only, i.e., individuals whose gross income is $200,000 or more or married couples filing jointly with a combined gross income of $250,000 or more.
- Even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.
- If you are a single tax payer, and you sell the home for $450,000, you would pocket $250,000 and still pay no tax. If you sold the home for more, say $500,000 – you pocket $300,000 and you pay a tax on the $50,000 at 3.8%, and you would have to pay $1,900. Under this same scenario, if you are married and file a joint tax return, you would have to sell your home for over $700,000 before having to pay any additional tax on the gain.
So do not worry about the dire messages that come your way. In fact, feel free to hit “delete” before even reading them.
April Partida is a Professional, Experienced and Results Oriented, Top Virginia Beach VA Realtor committed to meeting your needs.
April has distinguished herself as a leader in the Virginia Beach Virginia real estate market. April assists buyers looking for Virginia Beach VA real estate for sale and aggressively markets Virginia Beach homes for sale. April is also a Short Sales and Foreclosures Resource Specialist (SFR). Avoid foreclosure and short sale expert, committed to helping families in financial hardship find options to foreclosure.
You can reach April at 757-227-1777 or by email, firstname.lastname@example.org.
ALL of the information, NONE of the obligation!