Sales Tax on Homes?

This from an expert CPA! Robert Ellis

That is not exactly correct, but it is closer to the truth than comfort allows.

Since Obama’s health care bill passed, it has been circulating around the web that a 3.8% sales tax on home sales was included in the legislation.  But I could never find anything in the literature, so I basically discounted it.

However, it turns out where there is smoke there is fire.  There is such a tax.  Right now the tax is supposedly limited to high income taxpayers.  But when was the last time Congress wasted a great tax on a limited part of the population?  Never?  (As an example, even retired people must pay tax on their social security.)

Besides, even if you aren’t “high income” according to the government definition, you can still be caught up in this tax.  All you have to do to be subject to this tax is sell your house for $250,000.  You pay 6% commission then you pay 3.8% tax.  10% total is $25,000.  In today’s market, that could spell the difference between being right side up and upside down.

Plus, the tax is broader than just on home sales, it includes all investments you may have.

To be fair, there is some dispute over the reach of this legislation, but I personally no longer trust the MSM to report the truth.  A government in search of money can do what they want, unfortunately.

Read it on Snopes.  http://www.snopes.com/politics/taxes/realestate.asp