Health Care Plan: 3.8% Tax on Real Estate Home Sales

By
Real Estate Sales Representative with Kennewick Richland (and West) Pasco WA Homes For Sale

That Sinking FeelingThe Spokesman Review: "Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one."

The Spokesman Review is a Spokane Washington news source. The article is a must read for anyone interested in the consequences of Obama's health care solution. The article cites 19 new taxes we will be paying, most of which I was not aware of. And, I tend to be a news junky! In the article, Nancy Pelosi is cited as stating, "We have to pass the bill so that you can find out what is in it …" Well, find out we are! The article exposes likely taxes on all sorts of items folks will pay attributed to the new health care bill.

3.8% on home sales? You've got to be kidding me. Doesn't our housing market need to be stimulated. Hmm, it will be stimulated unfortunately in the wrong direction.

4/8/2010 Update: Since posting this article, there has been a correction made to the original article.  As it turns out, the tax increase will not effect most of us.  You can read about it here.

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Ambassador
883,869
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

There is a reason that promises of time to review the bill prior to signing CAN'T be honored.  People would find out about all of the crap and raise hell about it. 

Apr 05, 2010 10:52 PM #1
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Yup.  I think this health care bill is going to hit those of us who are self-employed really hard.  Probably because we make too much money.  :(

Apr 05, 2010 11:23 PM #2
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Collen & Joe - read the article, very interesting, did some checking and supposedly the tax is only on any profit above the $250,000 or $500,000 exemption under current law. However, was not able to find that in the bill.

There are so many hidden taxes that we will have to pay in this. I find it very disturbing that they are taxing the recipients of medical care who need medical devices, such as pacemakers or artificial knees and joints. This is going to make us pay more for the insurance while piling on more for the treatment.

Apr 06, 2010 06:52 AM #3
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Thanks for chiming in Mike.  At the end of he day, I wonder if the bill will even stand.  If a Google search is done for let's say, "obama health care bill unconstitutional" there is plenty of legal fodder to overturn what has transpired over the passed month.

Apr 06, 2010 07:38 AM #4
Anonymous
Anonymous
RLP2451

The author of the article is just assuming that a sales tax will be imposed.  There is no language currently in the bill that says this.

Apr 07, 2010 10:55 AM #5
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Thanks for commenting RLP2451! 

The bill does not state all sorts of things, however, the impact is obvious.  Search in Google, "will health care bill increase real estate taxes" or better yet, "will health care bill increase taxes" and you will find volumes written on how the bill will increase taxes.  It's kinda a no-brainer.  Our country is deeply in debt with no money to spend, so the money to pay for health care has to come from somewhere.

I have no problem paying extra (real estate) taxes for those less fortunate, but to cover folks entering our country illegally is another thing.

Apr 07, 2010 11:19 AM #6
Anonymous
Anonymous
Anonymous

http://www.spokesman.com/letters/2010/apr/01/response-paul-guppy-regarding-impact-health-care-b/

 

 

Apr 07, 2010 11:25 PM #7
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Thanks anonymous poster!  Your update is a welcome relief.  I've updated the original article to include the response you've provided.  ;)

Apr 08, 2010 07:09 AM #8
Anonymous
Anonymous
Jim

I read most of the legislation and I saw nothing that says illegal immigrants would be covered. In fact, they are covered right now. They just go to the emergency room and cause all of us to pay extra. So where's the difference?

Apr 11, 2010 02:06 PM #9
Rainer
63,376
Alexis Weigand
Keller Williams Luxury International, San Antonio - Boerne, TX

A friend just forwarded me the email about the tax increase. He is notorious for saying, "I don't know if it's true, I just pass them along." I'm rather new to Active Rain, and always being a sceptic of what I see forwarded via email, I researched the article, to find the source and the truth. Thank you Active Rain for leading me directly to the source and answer!

Apr 12, 2010 01:49 PM #10
Anonymous
Anonymous
michigan

A couple of things regarding this issue.  First, for anyone to be impacted, they must eran over 250k as a family or 200k as an individual, AND they must sell their home at a profit greater than 500k for couple or 250k for individuals.  If you bought a home 10 years ago for 500k, and it appreciated at 10% annually through 2005, then was flat, not even depreciating for the next five (even though most markets have declined in value), your home would be worth 805k now.  If you sold it and were a single individual, you would have made 305k minus the 250k exemption which leaves 55k times 3.8% you would owe  2,090 in taxes.  Just for perspective.  If you earned 199K annually or were married you would owe nothing.  The problem I have with most arguments is when people say things like "The bill does not state all sorts of things, however, the impact is obvious."  The bill doesn't say anything about most scary things so by default they are going to happen.  Lets go back and talk about all the stuff every bill ever proposed DIDN't say and claim the negative impact of things never addressed as the truth.  Simple statments for simple minds.  This kind of tax doesn't belong in a healthcare bill but lets get real.

Apr 15, 2010 05:40 PM #11
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Yup, I hear ya michigan.  I posted a correction to the original article in my blog entry.  ;)

Apr 15, 2010 10:45 PM #12
Anonymous
Anonymous
jobak

My question is this:

We are married and make $100,000 income.  Say we sell our house for a $650,000 profit.  We will pay capital gains taxes on $150,000 ($650,000 minus $500,000 exemption) at the new 20% rate.  Will the IRS now consider that $150,000 as additional income added to our $100,000 totalling $250,000 and now we're subject to the 3.8% healthcare tax?

 

Sep 04, 2010 03:45 AM #13
Rainmaker
254,151
Colleen Lane
Kennewick Richland (and West) Pasco WA Homes For Sale - Kennewick, WA
Kennewick Realtor, 509.438.9344 www.LaneRealEstate

Not sure jobak!  You would certainly need to seek your financial adviser on this one.  ;)

Sep 06, 2010 09:08 AM #14
Rainmaker
468,836
Janice Roosevelt
Rory Burkhart Team, Keller Williams - West Chester, PA
OICP ABR, ePRO,Ecobroker
Colleen, glad you posted this and the correction. Good information. Thanks.
Sep 29, 2010 10:01 AM #16
Anonymous
Anonymous
Bill

 I did some checking on mediamatters.org.....and as usual they defended the liberal attack on American families saying that the letter was completely false.....I wrote the folling comment....

Even if everything you claim is incorrect about the new tax taking effect on home sales after 2013.....the ugly truth is this....when has the government ever stopped increasing a tax after they get it written into law....The social security tax....started out as a small small amount from everyones paycheck and has grown to what it is today.......and is it to take care of them when they retire and get older....ooooops guess not.....it has been raded for years since a democrat put it into the general fund..  Democrats....get a tax started on the premise it is small and wont effect everyone....and before you know it....or when no one is paying attention..........BOOOM....they have changed the rules.....changed the format.....changed the percentage......and if you didnt have your head stuck so far up this Presidents rear end you would realize that is the truth.....and make a stand and do something to protect the American people instead of protecting your liberal ideology and the novice you put in office.   What this country needs is less taxation not more...explain it away however you want......it is all a pile of bull...that only stands to multiply

Jan 30, 2011 09:37 AM #17
Rainmaker
59,366
Elizabeth Bouchard
Long & Foster Realtors - Arlington, VA
Associate Broker in Northern Virginia

I know this is an old post but just ran across it as we are nearing the effective date for some of the health care reform.  Too many people (agents included) have misunderstood the tax and assume that every home sale with have an additional 3.8% tax.  Glad the facts were outlined here.  Very few people will have any additional tax at all, and if they do it is because they are in upper income brackets and made more than the $250,000 or $500,000 capital gain allowed on a primary residence.

Sep 19, 2013 12:11 PM #18
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Rainmaker
254,151

Colleen Lane

Kennewick Realtor, 509.438.9344 www.LaneRealEstate
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