REALTORS debunk all-encompassing home sale tax rumor

Realtors debunk all-encompassing home sale tax rumor

CHRISTOPHER QUINN
/ Cox Newspapers
Atlanta — Diane Michels of Atlanta received an email last summer claiming that she would have to pay a new 3.8 percent sales tax if she sold her house in order to move to a retirement home in Florida.
The unsolicited chain email, sent from "Michael W, Realtor," said, "If you sell your $400,000 home, there will be a $15,200 tax," and blames it on a provision of President Barack Obama's health care reform.
"We were also told to check into it by a real estate agent," Michels said by phone.
Although there is a new capital gains tax two years down the road for some high-end home sales, the untrue assumption of an all-inclusive home sales tax has been surging on Internet blogs, in outraged email letters and even has been mentioned in some news forums, such as "Fox & Friends." Last June, host Gretchen Carlson mentioned part of Obama's health plan was to raise taxes on home sales.
"This became an Internet rumor that took off like wildfire," said National Association of Realtors spokesman Walter Molony.
The NAR got so many inquiries that it created a brochure to set the record straight. Rest easy, Molony says. There is no new all-encompassing home sales tax.
However, the new tax that will apply to a portion of gains on high-profit home sales by high-income owners takes effect in 2013 and is expected to help raise money to pay for the health care plan.
Individual homeowners are allowed to exempt from taxes up to $250,000 in gains from a home sale and couples can exempt up to $500,000, said Spence Shumway, founder of the accounting firm StoneBridge. The 3.8 percent surcharge tax will apply to gains above those thresholds and if the homeowners earn more than $200,000 a year for an individual or $250,000 for a couple.
Bill Murray, a Prudential Georgia Realty broker in Atlanta, said agents are aware of the rumor. Agents are ready to explain, but he fears the rumor might prevent sellers or buyers from acting.
"What I am afraid of is that many people will not understand it and pull back and not ask questions," he said.
Source Detroit News Extra Your Money, Monday October 17, 2011

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