December 13, 2011

Clarification- Realty Transfer Fee

By ann

I wrote about this subject last October https://anndelaney.com/2010/10/04/clarification-on-medicare-tax/  and our local board of Realtors is asking us to continue sharing  factual information with the public.  

Memo from the director of the Cape May County Board of Realtors:

In response to numerous e-mails concerning provisions of the new federal health care law stating that there is a new 3.8% federal realty transfer fee (RTF) on all home sales, NJAR® urges you to visit NAR’s website for information regarding RUMORS that a national RTF was created as part of the federal health care law. These rumors are FALSE. An across-the-board RTF DOES NOT exist as part of this or any other law.

As part of the federal health care law, a 3.8% medicare tax was enacted on net investment incomes for certain households (for individuals earning over $200,000 per year and couples earning over $250,000 per year). Furthermore, the 3.8% tax DOES NOT apply to all capital gains from a home sale. Only if the gain from the sale is over $250,000 for individuals or $500,000 for couples does the 3.8% tax apply. If the amount made from the sale as a gain is less than $250,000 for individuals or $500,000 for couples, the 3.8% tax does not have to be paid. Lastly, the 3.8% tax, if these provisions are met, does not take effect until January 1, 2013.
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