Belmont City Council Quietly Exploring “View Impact Fee” for Certain Homes

Belmont View Fee

In a move that has already begun circulating among local homeowners, the Belmont City Council is reportedly exploring a new proposal aimed at addressing what officials are referring to as “view equity.”

According to early discussion drafts, the concept centers around a potential “View Impact Fee” that would apply to homes benefiting from partial or panoramic views of the San Francisco Bay.

The rationale?
Properties with premium outlooks, particularly those capturing unobstructed Bay and Mt. Diablo views, are seen as receiving a “disproportionate benefit from shared natural resources.”


How It Would Work

While still in the exploratory phase, the proposal outlines a tiered structure:

  • Tier 1: Glimpses of the Bay
  • Tier 2: Partial Bay views
  • Tier 3: Panoramic or unobstructed views

Annual fees would reportedly scale based on view classification, with funds allocated toward:

  • “Community aesthetic enhancements”
  • Tree canopy management programs
  • Public viewpoint improvements

The “View Equity” Argument

A council subcommittee is said to be evaluating how to “balance access to scenic resources” across neighborhoods.

One early draft reportedly states:

“While views are inherently tied to location and topography, the broader community contributes to the preservation and desirability of these assets.”


What This Could Mean for Homeowners

Although no formal vote has been scheduled, the concept has already sparked quiet conversations—particularly among homeowners in Belmont’s hill neighborhoods, where views are a defining feature of property value.

Some are questioning how views would be measured, how frequently classifications would be reassessed, and whether improvements (such as tree trimming or second-story additions) could impact a home’s “view tier.”


Early Takeaway

At this stage, the proposal remains informal and under review. However, it highlights an ongoing theme in Peninsula communities—how to balance property rights, natural assets, and neighborhood equity.

All the Best,

Drew & Christine Signature

About the Authors

Drew and Christine Morgan are the founders of MorganHomes, their independent brokerage based in Belmont. They also maintain a strategic affiliation with RE/MAX GOLD, combining the flexibility of an independent firm with the resources of one of the largest real estate networks.

As longtime Belmont residents and real estate professionals with more than 30 years of experience, they have helped generations of local families buy, sell, and make smart real estate decisions. Drew is also a Notary Public, providing additional convenience and support for clients when it matters most.

Their consistent performance has earned them RE/MAX’s prestigious Diamond Award, placing them among the top agents nationwide and among the top performers in Northern California.

If you have questions about the Belmont market or would like to discuss your situation, you can reach them at (650) 508-1441 or info@morganhomes.com.

For ongoing insights about Belmont real estate, local market trends, and community updates, you can subscribe to this blog or follow MorganHomes on Facebook and X.


Disclaimer

This article is provided for educational and informational purposes only. It is not intended as real estate, legal, tax, or insurance advice. Because every situation is unique, we recommend consulting with a qualified professional, like us, to understand your specific circumstances.

Thinking About Selling or Buying in this year? Here’s What We’re Seeing Locally

Bay Area Homes

As we move into the second quarter of 2026, we’ve been getting a lot of the same question:

The honest answer is—no one can predict it with certainty. But we can look at patterns, buyer behavior, and what we’re seeing on the ground to get a pretty good sense of where things are headed.


There’s a lot going on right now that’s influencing how people feel about making big decisions:

  • Interest rates have moved higher
  • The cost of goods and services continues to rise
  • There’s more global uncertainty than we’ve seen in a while
  • The job market is shifting
  • And consumer confidence, which had been improving, is starting to soften

Any one of these on its own doesn’t change the market much.
But when they all show up at once, people tend to take a step back.


In times like this, most buyers don’t panic—they pause.

Instead of rushing in, they take more of a “wait and see” approach:

  • They become more cautious
  • They look more closely at value
  • They’re less willing to stretch beyond their comfort zone

In other words, the most aggressive buyers start to step back first.


So what does that look like in real life?

You’ll likely see fewer bidding wars.
Instead of 10–15 offers, it may be more like:

  • 2–5 offers on strong homes
  • And sometimes just one solid, well-qualified buyer

At the same time, buyers become more selective.

Homes that are:

  • Well-priced
  • Move-in ready
  • In strong locations

…are still going to do well.

Homes with trade-offs—or pricing that feels a little too aggressive—may take longer to sell.

And overall, price growth tends to slow.
Not necessarily decline dramatically—but level off or adjust modestly.


There’s also another dynamic worth mentioning.

In uncertain times, some buyers actually lean into real estate.
They’re looking for:

  • Stability
  • Something tangible
  • A long-term place to land

But even these buyers tend to be more thoughtful.
They’re not the ones overpaying—they’re looking for value.


The Bay Area has always had some built-in support:

  • Limited housing supply
  • A strong base of high-income buyers
  • Long-term demand for homeownership

That doesn’t make it immune to change—but it does tend to prevent more dramatic swings.


If current trends continue, the most likely scenario is a more balanced, selective market.

  • Buyers are still there—but more cautious
  • Competition still happens—but not as consistently
  • And pricing becomes more important than ever

The margin for error just gets smaller.


For sellers, this doesn’t eliminate opportunity—it just changes the approach.

The homes that are performing best right now are the ones that:

  • Are priced strategically from the start
  • Show well and feel move-in ready
  • Line up with what buyers are expecting today

Where we’re seeing challenges is when homes:

  • Start too high
  • Rely on past peak comps
  • Or assume buyers will stretch the way they did before

That’s where momentum can get lost.


The housing market isn’t disappearing—it’s becoming more disciplined.

And in markets like this, the difference between an average result and a strong one usually comes down to:

strategy, positioning, and timing.

Drew & Christine Signature

Frequently Asked Questions

Why are homes getting fewer offers?

Is the Bay Area housing market slowing down in 2026?

Are home prices expected to drop?

Is now a good time to sell in Belmont?

Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA, where they own and operate MORGANHOMES, Inc. They have assisted buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award, ranking among the top 50 agents nationwide and the top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or emailinfo@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on X.

This article provides educational information and is intended for informational purposes only. It should not be considered real estate, tax, insurance, or legal advice; it cannot replace advice tailored to your situation. It’s always best to seek guidance from a professional familiar with your scenario.

BROKER OWNER | MANAGER | NOTARY

The Belmont Market Is Moving Fast — Are You Positioned to Take Advantage?

Belmont From Above

Belmont Housing Market: A Little More Choice — But Still Moving Fast

We’re about two-thirds of the way through the first quarter of 2026, and the early read on the Belmont housing market is coming into focus.

Inventory has opened up modestly. So far this year, 39 homes have come to market, compared with 34 during the same period last year — about a 15% increase. Currently, there are 31 properties in the pipeline, including 19 active listings available to buyers and another 10 “coming soon” homes preparing to enter the market. Eight properties are already pending.

At first glance, the increase in listings appears to be good news for buyers. And to a degree, it is — there are slightly more choices than there were a year ago.

But the market’s pace tells a more important story.

Homes that are going pending are averaging just nine days on the market. That’s a clear signal that new inventory is being absorbed quickly. In fact, the buyers we’ve represented this year have still found themselves in highly competitive situations. On the last two homes we pursued, each drew roughly 15 offers.

That combination — more listings, but very fast absorption — suggests that demand remains strong and pricing pressure is holding firm. If the market were softening, we would expect to see homes sitting on the market longer, more price reductions, and fewer competing offers. So far, none of those conditions are showing up in the data.

It’s still early, and there haven’t been enough closed sales yet to draw firm conclusions about pricing trends for 2026. But the early indicators point to a market that remains still seller-leaning, with motivated buyers acting quickly when well-prepared homes come to market.

The takeaway: Belmont buyers may have a few more options this year — but the window to act is still short, and competition hasn’t gone away.

What this means for you depends on your timing and your strategy.
If you’re thinking about buying or selling in Belmont this year, the early trends suggest preparation and positioning matter more than ever. Sellers need to price and present their homes correctly to capture today’s fast-moving demand, and buyers need a clear plan to compete when the right property appears. If you’d like a quick, no-pressure review of your home’s current value, or a strategy session to understand your options in today’s market, feel free to reach out. We’re always happy to share what we’re seeing locally and help you make informed decisions about your next move.

About the Authors

Drew and Christine Morgan are the founders of MorganHomes, their independent brokerage based in Belmont. They also maintain a strategic affiliation with RE/MAX GOLD, combining the flexibility of an independent firm with the resources of one of the largest real estate networks.

As longtime Belmont residents and real estate professionals with more than 30 years of experience, they have helped generations of local families buy, sell, and make smart real estate decisions. Drew is also a Notary Public, providing additional convenience and support for clients when it matters most.

Their consistent performance has earned them RE/MAX’s prestigious Diamond Award, placing them among the top agents nationwide and among the top performers in Northern California.

If you have questions about the Belmont market or would like to discuss your situation, you can reach them at (650) 508-1441 or info@morganhomes.com.

For ongoing insights about Belmont real estate, local market trends, and community updates, you can subscribe to this blog or follow MorganHomes on Facebook and X.


Disclaimer

This article is provided for educational and informational purposes only. It is not intended as real estate, legal, tax, or insurance advice. Because every situation is unique, we recommend consulting with a qualified professional, like us, to understand your specific circumstances.

MorganHomes
Broker | REALTORS | Notary

DRE#01124318 | 01174047

California to Offer $3,000 Subsidy for Earthquake Retrofitting

If you’re reading this, chances are you’re living near a major earthquake fault. Now if you’re unsure if you live near an active fault, this web site . Temblor, co-founded by Ross Stein from the USGS, is very useful for determining the proximity to, and estimating the damage from, an earthquake near your home.

We don’t have to go into graphic details about what could happen to your home and those who may reside within in the event of a significant earthquake, but here’s a good image from the California Earthquake Authority as to what damage can be done to homes with older unbraced foundations.

Sure one can purchase earthquake insurance, but that only helps to rebuild after the devastation of an earthquake has occurred. What earthquake retrofitting is designed for is to help prevent damage to your home, property or lives during or after an earthquake.

We did a blog post not long ago about the benefits of an automatic gas shut off valve. This article has to do with the program California is offering of up to $3,000 of a subsidy towards retrofitting your home’s foundation to help withstand an earthquake under a program entitled Earthquake Brace and Bolt, or EBB.

Limitations apply, for example Belmont didn’t even make the cut this year for retrofits, while San Carlos, Foster City, San Mateo and Redwood City along with a whole host of other cities nearby did. This is a link to a complete list of towns covered by the program this year. 

Additionally, this is not for homes with a slab foundation, or homes built after 1979, and there are other restrictions such as the height of your home’s cripple wall, so follow this link to get some more details from their short video.

The window for registration is open now and closes fast:

2019 EBB Program ZIP Codes – Registration Period will Open October 9 – November 13, 2018

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

 

 

Nothing Remains the Same, Except Change

Nothing remains the same, except change—with each change being slightly different than the one before…

By The Numbers

Now that the waning dog days of summer are upon us, we felt it was time to summarize the second quarter sales for the year. I mean, doesn’t everyone want to know, “How is the Market”? It’s the question posed to us most frequently, and I guess rightly so. After all, for many, ok, I’ll expand that for most people, their Bay Area home is their largest asset—their nest egg. It’s akin to people in other areas of the country, where home prices are more understandable, tracking their 401k’s, stock performance, or their own bank accounts on a daily basis.

When the market takes a nose dive again, and it will, if you’re anywhere near retirement, you had better have a plan “A” now, or you’ll invariably be implementing the alternative, plan “B”, which means you might just get stuck in retirement purgatory waiting for the values to come back so you can cash-out on all of that equity you once had.

This is also the time of year when many of my colleagues come to me in hushed voices wearing ghastly, pasty facial expressions contorted into the most unpleasant sight and reeking of fear, asking me if I noticed that the market is down…that there’s been a shift, and did I notice it, and do I feel the same way. I don’t. I’ve been tracking home sales statistics for my entire career, and it’s normal, heck it’s expected that in the summer the market slows. In typical fashion, agents will post these dire statistics from summer to what amounts to nothing more than fear mongering. Of course the market has slowed down, its summer!

Why? Because people have lives—and they go live them. It’s interesting to observe that the better the economy, the more pronounced how this housing hiatus manifests itself—more money, more market confidence, means you might as well pack up the family and head off for an extended vacation to some romantic or adventures place, like Disneyland. Because let’s face it, once the kids are out of school, parents have to do something to burn off that pent-up energy and it’s certainly not going to be tamed traipsing around open houses every weekend.

Then there’s the inarguable fact that the high bidders for homes in the spring market have already won. They’ve got the home they want, and now they’re leaving the housing hunt rat race in the dust and soaking up all of the equity future buyers will be serving up to them on a silver platter.

So instead of looking back at the spring market and wishing our business was just as brisk and our pipeline as full, we do what one should do and that is to compare and contrast the same period year-over-year to better understand, without hyperbole, pre-conceived notions, or hysteria, what the heck is really going on.

To this we look at the entire market of San Mateo County. It gives us a better more macro view of home trends than say limiting our analyses to a small town like Belmont, however charming it is, but also highly susceptible to wild swings in its small market sample size.

Here we see a different story emanating from the lines of a spreadsheet. The market isn’t down, any more than it should be for this time of the year, and in fact it’s quite strong.

The median home price for San Mateo County in Q2 rose $185,000 YOY or 13%, while sellers also enjoyed receiving 3% more over their asking price.

The number of new listings was up 9%, while sales were down 4%, causing the housing inventory to rise an aggregate 19%.


So the sky isn’t falling. The activity in the market is not quite as brisk, but with all that meddling in people’s mortgage tax deductions that’s to be expected. Now, everyone can go back into their happy place imagining that home values will always go up in the Bay Area with the trajectory of a missile launch, until that missile misfires and lands right back from where it took off.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

 

 

 

New Listings in Pricey Bay Area Counties Rose Significantly

The California Association of REALTORS™  has released a recent report on the state of the California’s housing, naming San Mateo County as having the highest median price in the state. They went one to mention the rising number of new listings. Could this mean that sellers are finally thinking the market is near its top? Will housing inventory open up, and water down the tidal wave of multiple offers? It’s probably too soon in the year to tell, but the tide may be changing, as we commented on at the end of 2016.

• C.A.R.’s Unsold Inventory Index, which measures the number of months needed to sell the supply of homes on the market at the current sales rate, rose to 3.7 months in January from 2.6 months in December. The index stood at 4.3 months in January 2016.

• New listings in pricey Bay Area counties, such as Marin, San Francisco, San Mateo, and Santa Clara rose significantly from December, a possible indication of sellers cashing out robust price appreciation experienced over the past few years.

• New statewide active listings continued to decline, dipping 0.3 percent from December and 10.5 percent from January 2016.

• The median number of days it took to sell a single-family home went up from 33 days in December to 37 days in January but was down from 44.2 days in January 2016.

• C.A.R.’s sales-to-list price ratio* was 98.1 of listing prices statewide in January, 98.2 percent in December and 97.8 in January 2016.

• The average price per square foot** for an existing, single-family home statewide was $240 in January, $242 in December, and $228 in January 2016.
• San Francisco County had the highest price per square foot in January at $841/sq. ft., followed by San Mateo ($723/sq. ft.), and Santa Clara ($567/sq. ft.). Counties with the lowest price per square foot in January included Del Norte ($124/sq. ft.), Kings ($125/sq. ft.), and Kern ($127/sq. ft.).

• After mortgage rates surged in the final few weeks of 2016, the 30-year, fixed-mortgage interest rate averaged 4.15 percent in January, down from 4.2 percent in December but was up from 3.87 percent in January 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates edged up in January to an average of 3.24 percent, from 3.23 percent in December and 2.98 percent in January 2016.

Reprinted with permission form the California Association of REALTORS®

_____________________________________________________________________________________

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

How to Find the Best Schools

This you already know: Parents want to send their kids to good schools. So that’s why they flock to neighborhoods—sometimes paying hundreds of thousands more to live there—that purport to have them. But what does “good school” really mean? Is it really all about the test scores?

Increasingly, educational experts say: not really. These days, many of them hail the importance of other, less tangible goals such as fostering social and emotional intelligence. Others tout the importance of executive function skills: the ability to plan, focus, remember instructions, and multitask. In the Finnish school system, purportedly the best in the world, academics are delayed, homework and testing are minimized, and free play time is valued.

But not so much in the U.S. With the ever-growing emphasis on standardized test scores, including for the new Common Core standards, educators and parents worry that schools are “teaching to the test” instead of teaching what kids need.

So how can you really figure out what that is? As with all things parenting, you have to decide for yourself what’s best for your family. Here are some tips on how to figure that out.

Determine what kind of learner your child is.

No matter what kids are required to learn, there are different ways to get them there.

Kids often have strikingly different learning styles. Some are visual, and fare better when things are illustrated rather than spoken; some learn better in groups; some are better able to focus if they’re alone. And some simply learn best by doing. And while no school caters entirely to one kind of learner, you may be able to find a school whose approach works better for your kid. Talk to the principal and teachers about how they accommodate different learning styles.

Find out if the school has the basics

Traditional barometers such as class size, student-to-teacher ratio and, yeah, test scores do matter—to some extent.

“They’re the best predictors of a school or district’s academic foundation,” says Bill Jackson, founder and CEO of GreatSchools, a nonprofit organization that provides nationwide school ratings. And schools need that foundation so they have something on which to build and to set goals.

Joyce Szuflita, an educational coach and founder of NYC School Help in New York City, has another view.

“If I were stuck on a desert island and could only ask for one piece of data while considering a school for my child, I’d want to know the percentage of kids who are chronically absent,” she says, arguing that a high attendance rate indicates a positive school culture in which the staff, students, and parents are all committed to success.

Look beyond academic development

In addition to solid academics, experts increasingly tout the importance of a holistic education, which cultivates students’ moral, emotional, physical, and psychological aptitudes.

Schools with programs that teach empathy, self-motivation, and adaptability—or emotional intelligence—equip students with the life skills proven to foster success. Having a high IQ might demonstrate mastery of a body of knowledge, but a high EQ (emotional quotient) indicates that a student can be flexible and understanding, synthesize information and successfully interact with all kinds of people, which might be better predictors of future success than high grades or scores.

Seek creative learning opportunities

Forget rote memorization; the academic and intellectual skills needed to thrive in tomorrow’s multinational, dynamic workforce aren’t the same as those that led to success before the millennium.

“Expansive ideas and creative thinking will become even more essential in the future,” says Dr. Shimi Kang, author of the forthcoming book “The Self-Motivated Kid: How to Raise Happy, Healthy Children Who Know What They Want and Go After It (Without Being Told).” Consequently, she contends that a “good” school today is one that helps foster 21st-century skills such as creativity, collaboration, communication, and critical thinking.

These might be schools with highly developed music programs, team sports, extracurricular clubs with broad focus (environmental protection, community service, even juggling or a “Harry Potter”-themed Wizards & Muggles club)—any activity that develops diligence, creativity, and quick thinking.

Consider lower-ranked or up-and-coming schools

Szuflita suggests resisting the urge to follow the crowds to the “best” schools in town, which could have problems with overcrowding and waitlists, despite their virtues. Instead, track the progress of previously overlooked schools, ones that may have a new principal, an increasingly active PTA, and/or an attendance rate that has steadily risen, even if the school itself doesn’t have the most stellar reputation or highest rankings.

Research (free) alternatives to public schools.

Themed charter schools (which receive public funding but operate outside of their regional public school districts) or magnet schools (public schools with specialized courses or curricula that draw students from across school districts or zones) infuse their offerings and activities with a specific emphasis.

At Expeditionary Learning schools (nationwide), for instance, students study a single topic from many angles. Heavy emphasis is placed on the importance of nature, reflection, and service, and classes can involve Outward Bound–style excursions.

The tuition-free Muskegon Montessori Academy for Environmental Change in Norton Shores, MI, drives home the importance of clean water by having students care for the local river.

Schools that take the multiple intelligences view recognize that intellect comes in many forms (e.g., word smart, people smart, numbers smart) and teach to individuals’ strengths.

Check out the ‘vibe’—it really means something.

This may seem obvious, but we can’t stress it enough: Go see the schools for yourself, and visit as many as possible. (By the way, did you know you can search for homes by school district on our app?) You might discover what you thought was important isn’t really at all. And test scores and state rankings don’t convey the important yet difficult-to-quantify vibe of a place.

“Actually experiencing a school is the best way to inspect the vitality of the work, the energy of the teachers, and the rapport between the staff and students,” says Szuflita.

One tip: Arrive early to the visit, so you can evaluate the school when no one is looking.

Ask yourself what ‘good’ means to you.

What do you want from your school? Racial and economic diversity? Sports and arts programs? A campus? Leadership/internship opportunities? Is your No. 1 criterion a neighborhood school that you can invest and create community in, even if it means sacrificing a few things like class size or an emphasis on the arts?

If traditional academics and high test scores really are the most important things, you’re lucky: Those are the easiest things to find.

Today, finding a good school means you grown-ups have to do serious homework, figuring out the best fit for your family and zeroing in on schools that are equipping students with the skills and experiences that will lead to a broader definition of success.

Anything else no longer makes the grade.

Contributed by Audrey Brashich
Audrey D. Brashich writes regularly about trending pop culture issues for The Washington Post, Yahoo Parenting and other national news outlets. She is also the author of All Made Up: A Girl’s Guide to Seeing Through Celebrity Hype and Celebrating Real Beauty.

Do You Plan on Spending More This Year Than Last?

You all were so accurate at predicting the school bond poll results we thought we’d send out another one to see if this year retailers will get in the black.

We’ve been out shopping for Thanksgiving and are seeing a lot of activity in the stores. That caused us to wonder if people feel confident enough about the economy, and have the wherewithal, to spend more than last year on entertaining or gifts.

Let us know what you think and maybe you’ll even get an indication if that special gift you’re after will be on sale the day after Christmas, or fly off the shelves weeks before.

New 3.8% “Real Estate Sales Tax” gets a lot of play

You may have already heard through an errant email or co-worker that hidden in the health care bill was a provision for adding a 3.8% sales tax on the sale of your home.

We’ve even been forwarded emails with the story contained in a newspaper article. So is there any truth to it? Well, sort of.

The much ballyhooed 3.8% tax in the health care bill which takes effect in 2013 is actually a Medicare tax on investment income—not a real estate tax per se. That alone might not make you feel any better but read on.

According to factcheck.org , which did extensive research, there are very limited circumstances in which this tax would be levied.

As it would apply to real estate, first your income would need to be over $200,000 a year ($250,000 for married couples filing jointly).

 Now if you’re selling your principle residence, the first $250,000 of gain for single tax filers and $500,000 for those who file jointly would be exempt from taxation—as it currently stands for capital gain taxation.

The 3.8% tax would, as we understand it, apply only to the portion which might exceed this threshold. It’s also important to note that this tax is on the gain, not the sale price. So if you were to sell a home you and your spouse bought for $500,000 several years later (you need to have lived in the home two of the past five years) for $800,000, you would have a gain of $300,000. This is of course is further diminished by any capital improvements you made to the property and selling costs but to keep it simple we’ll use the higher figure of $300,000. Based on this you would still owe no capital gain tax nor would you owe the new Medicare Tax even if your income was over the $250,000 threshold because your gain was only $300,000—less than the allowable first $500,000 which is forgiven.

So several things need to happen before you would be subject to the tax:

  • Your income must exceed the thresholds mentioned above.
  • Your gain on the sale of your home must exceed the allowable forgiven limits.

Note that this capital gain exclusion is for your principle residence only so high wage earners who sell their investment properties would be subject to this new tax on that gain—assuming they had gain to tax.

As far as we can tell the viral nature of this email succeeded in part because it resonates with what many readers feared about the health care bill—that it would be caulk full of special interest groups’ and hidden agendas. Further exacerbating this was that many email authors added their own spin by including miscalculated and outrageous examples of how the tax would be applied. Their agenda was then further picked up by those who wish to freighted people into voting the way they would want by saying, as the email I received said, “People have the right to know the truth because an election is coming in November!”

I couldn’t agree more and we hope this explanation is closer to that truth.

Now for the inevitable disclaimer: The information contained in this newsletter is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.