3.8% Tax On Housing? 10 Things You Need To Know
1.) When you add up all of your income from every source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax. 2.) The 3.8% tax will NEVER be collected as a transfer tax on real estate, so you will never pay this tax at the time you purchase a home or other investment property. 3.) You will never pay this tax at settlement when you sell your home or investment. Any capital gain realized at settlement is just one component of that year’s gross income. 4.) If you sell your principle residence, you will still receive the full benefit of $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amoun...