Sales Tax Holiday Weekend; So What's a Tax Stamp?

Everyone knows this weekend is the Massachusetts sales tax holiday! Who doesn’t love a tax

holiday? We hear a lot of news about federal income tax, state income tax, property taxes, capital gains tax, tax loop-holes, proposals for new taxes on everything from gasoline to computer services…taxes are always being talked about.

The tax we never hear about is called a “tax stamp”. A what? It’s the tax the state of Massachusetts collects when you sell a house. When I talk with people who are planning to sell their home about what their selling expenses will be, they are almost always surprised (and not in a good way) to hear they have to pay the state when they sell.

How much is it? $4.56 per thousand and unlike federal gain taxes that are only on the “gain” and there are standard exemptions (check with you accountant), tax stamps are paid on the total sale price whether you have a gain or not.

Example: You sell your house $550,000. The tax would be 550 x $4.56 = $3,058.00. This is the amount that will show up on the as a deduction on the sellers side of HUD settlement statement and paid at closing (before you get the proceeds.)

So that's what a "tax stamp" is! Enjoy the sales tax holiday even if you're planning to sell!
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Marilyn Messenger has been selling residential real estate  in the Wayland/Sudbury area for 20 years. Visit www.MarilynMessenger.com or call 508-596-3501 for answers to your home selling and/or buying. questions.

If I'd Known...

We’ve probably all said or at least thought “if I knew then, what I know now, I would have done things differently.” We should have stayed in school longer. We should have listened to our parents. We should have bought Apple stock in 2002 for $8.50 that sells for $400 today. Or we could have bought gold in 2000 for under $300 for a four-fold profit today.

Years from now, if we look back at 2012, we may say that it was the best buyer’s market ever. Even now, in 2013, it’s apparent that both housing and mortgage prices are going up and they may never return to the record low levels.
The housing affordability index, which is considered to be good at 100, had increased to over 200 this past December, January and February. Shrinking inventories and rising prices in most markets have caused the index to fall to 172.7 for May 2013.

This market applies equally to acquiring a home to live in or a home to use as a rental. It is estimated that about 30% of the property purchased last year was done by investors. It is understandable because the positive cash flows far exceed most other investment alternatives.

Homeowners moving up in a rising market may sell their home for more by waiting but it will also cost them more for a new house. Typically, a person buys a 50% larger home when they move up. If they wait for prices to go up 10% on the $150,000 home they're selling, they’ll realize $15,000 more but will pay $22,500 more for the new home purchase. They’ll actually net $7,500 less by waiting for prices to go up and may have to pay a higher mortgage rate too.

The question homebuyers and investors alike are faced with today is whether they will be saying years from now that they seized or missed an opportunity of a lifetime.
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NOTE: Housing prices are examples taken from national stats. The prices in Concord, Wayland, Sudbury and the suburbs west of Boston are substantially higher, however the principle concept in this post still apply.

View market reports, search for homes and sign up for MLS listing updates go to www.MarilynMessenger.com or call 508-596-3501.