It has been noted on multiple occasions that the new health care bill includes a tax on capital gains within real estate. I wanted to make some clarifications so our industry knows how to address this bill. There is a 3.8% tax on capital gains, but there are provisions. For those that earn over $200,000 annually ($250,000 if married) are subject to a 3.8% housing capital gains tax. The tax will not apply to the first $250,000 in capital gains ($500,000 for married couples), only the gains over those amount depending on your situation.
I understand the state of the economy and the need to cover deficits, but continuing to take away benefits of home ownership does not provide a solution to the problem. Homeownership has always provided individuals the comfort of knowing that their home can provide great financial benefits. I understand the drop in values, but if you consider the long term investment and the annual appreciation of real estate, the benefits of homeownership should be left alone. Housing is a critical part to the overall economy, and we saw just how powerful it got when the economy boomed and when it crashed. Providing some stability in the housing segment is great for a long term approach. To start taxing gains now I find to be a bit rash and influenced by current economic times. Homeowners shouldn’t be punished more than they have been already. Many people are relying on homeownership gains for their retirement, and even if they still have over the allocated amounts in which they will be taxed, it is still far less than what they thought they would have dating back 4-5 years.
I’m getting the feeling that those that have worked 40+ years and have been responsible in their spending and increasing their overall are being punished for doing so. I struggle with the premise all together.
Here is a link for further clarification – http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home
