The agents in Koenig & Strey’s Libertyville office have found themselves explaining away a viral email that keeps resurfacing to home sellers regarding a new real estate tax. Says Vice President and Branch Manager John Santo, “I thought I was done with this in 2010, but it’s surfaced again.”
The target is Obama Health care reform and Democratic lawmakers – the fallout is misinformation about a new 3.8% real estate tax set to take effect when the health care bill becomes law. And it would be cause for some home seller consternation, if it were true.
The email states that your Democratic lawmakers, Nancy, Harry, Barack and [insert local names here] have ‘snuck’ a 3.8 percent sales tax on the profits of selling your home into the health care law.
The truth is that there IS a 3.8% tax, but the provisions of the tax are such that only a tiny percentage of home sellers will actually owe it – and even then, not on the full profit of a sale. The tax will hit approximately the top 2% of families when it takes effect in 2013.
The content of the actual legislation is in highly technical language that only a qualified tax expert can fully grasp, but if you want a better explanation or need to explain the realities to a client, FactCheck.org does a good job of clarifying the provisions of the tax.