Rumors have spread about this 3.8% tax. The National Association of REALTORS has done an excellent job explaining the details of the tax. The video is only 6 minutes and explains the property owners that are effected by the tax. I hope this information is helpful. Don't hesitate to contact me if you have any additional questions.
Rumors about the 3.8% Medicare tax continue to circulate. Here's the definitive word on what's true and what's not on how the tax impacts real estate.
Ever since health care reform was enacted into law more than two years ago, rumors have been circulating on the Internet and in e-mails that the law contains a 3.8 percent tax on real estate. The tax doesn't target real estate and will in fact affect very few home sales, because it's a tax that will only affect high-income households that realize a substantial gain on an asset sale, including on a home sale, once other factors are taken into account. Maybe 2-3 percent of home sellers will be affected.
Nevertheless, the rumors persist and the latest version that's circulating falsely say NAR is advocating for the tax's repeal. But while NAR doesn't support the tax (it was added into the health care law at the last minute and never considered in hearings), it's not advocating for its repeal at this time.
The characterization of the 3.8 percent tax as a tax on real estate is an example of an Internet rumor, says Heather Elias, NAR's director of social business media. Elias and Linda Goold, NAR's director of tax policy, sat down for a discussion of how the tax works.