fiscal cliff deal.
The two components impacting property investors in New York and the US are as follows:
A. Federal capital gains tax will increase from 15% to 20% for individuals making more than $400,000 per year ($450,000 for married couples).
B. Investment income and capital gains are now subject to a 3.8% Medicare surcharge for individuals making more than $200,000 per year ($250,000 for married couples).
To a foreign investor having a $1 million to $5 million New York property, it is unlikely taxable income will be anywhere near $200,000 per year which is when the Medicare surcharge kicks in.
This is especially since, in the US, there is an allowed depreciation charge on rental property which substantially decreases taxable income.
Wei Min Tan is a Manhattan, New York property broker focusing on luxury condominiums. His media appearances include being on The New York Times, Wall Street Journal and CNN Money.
Disclosure: Always consult your tax professional for tax related matters. The above is not from a qualified tax professional or CPA.