Obamacare Tax on Real Estate: Just the Facts

There is a new fear among those selling real estate. The fear is that there is a tax on all real estate transactions under Obamacare. There’s no need to worry; not every transaction will be taxed. Let’s look at what this tax really will be.
The tax affects investment properties, and only after certain income requirements. It’s not a sales tax, but a levy tax. The tax was created as a Medicare tax of 3.8% for high income households. Not all real estate transactions are subject to this new tax, nor will all investment transactions be subject to the additional rate.
The first hurdle that needs to be cleared for the tax to apply to your transaction is your household has to earn a combined income of $250,000.00 or greater, and individuals must earn more than $200,000.00. Clearly, this stipulation alone doesn’t apply to the average home seller.
Next, the investment property must have a return on investment above the capital gains threshold of $250,000.00 for an individual or $500,000.00 for a couple.
So, basically you have to earn $200,000.00 individually, or $250,000.00 combined and sell the investment property for more than $250,000.00 individually, or $500,000.00 combined for the Obamacare tax to affect your real estate deal.
Hopefully, this clears up some confusion about the new tax. If you have any further questions regarding selling real estate we will be happy to help you, so give us a call.

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Want Your Offer to Stand Out in a Bidding War? Write a Letter

It is certainly a seller’s market right now, and bidding wars are more common than not. How can you help your offer stand out from the rest? Consider writing a letter.

Writing a letter is the easiest thing a buyer can do to stand out from other buyers. Think about it: When was the last time you wrote a letter?  With email, Facebook status updates, tweets, texts, and all those other places to leave a comment in the electronic universe, nobody sends or receives letters anymore. The fact that you took the time to include something personal in your offer will at least get it a closer look from the seller.

Your letter should include something personal. Appeal to the seller’s humanity. Have children? Tell the seller how much your kids would love playing in the backyard, or how the finished basement would make the perfect playroom. Let them know your dog has never had a yard complete with his own doggy door, and how great it would be. Compliment the crown molding. Wax poetic about the wood floors. However, you have to be honest. Nobody likes a canned or empty compliment. Consider thanking the current owners for making time for their house to be available for a showing.

Keep in mind the best letter won’t make up for a low offer in today’s market. If the house in question is the one for you, make sure to put your best offer on the table. A letter to go with your strong offer will help you stand out in the crowd. If you are ready to purchase a home of your very own, give us a call. We will help you find the perfect house to call home.