What you need to know about the 3.8% tax on your next Real Estate transaction.
Many months ago when I heard about the 3.8% tax, initially I thought it was a sales tax on every property sold. So, if you were a seller, not only would you pay real estate commission, but now you would have to pay an additional 3.8% of the sales price!
Thankfully, this is not the case. In fact, the 3.8% tax doesn’t apply to everyone and will only affect some real estate transactions. Bottom line…if your adjusted gross income is over $200,000 (individual) or $250,000 (couple filing joint return) you will pay more taxes.
Here is an informational brochure the National Association of Realtors (NAR) created for the Realtor® community. Thought I would share it as it explains the 3.8% tax in a very simple manner. Click this link for the brochure: The 3.8% Tax, Real Estate Scenarios & Examples
The tax is complicated and by no means is this tax advice, just great information on the 3.8% tax, effective January 1, 2013.