Boost in Luxury Home Sales
According to the National Association of Realtors, the sale of luxury homes escalated in the final months of 2012. NAR reports sales of homes valued at $1 million or more spiked 51% in November compared with 2011 sales. The looming fiscal cliff was an incentive to accelerate the sales. Many sellers wanted to cash in on their home before the anticipated capital gains hike from 15% to 20% was put into practice. In addition, high-end buyers rushed to take advantage of lower tax rates before January 1, 2013, including a 3.8% Medicare surtax on investment income as part of the Affordable Care Act. A high income earner would have saved a significant amount of taxes if they made a $1 million profit on the sale of their home in 2012 as compared to 2013.