January 1, 2008 House Bill 2592 will go into effect. What does this mean? For the out of state seller it means less money in the short run. If an out of state seller sells an Oregon property after January 1, 2008 new legislation will require a mandatory withholding for income taxes.
The withholding will be from the seller’s proceeds at the time of closing. The new 2008 sales agreement will have text that pertains to this and the new law.
What to expect – from looking over the bill which can be viewed at http://www.leg.state.or.us/07reg/measpdf/hb2500.dir/hb2592.intro.pdf I see it as you should expect to have 4% of the net proceeds or 10% of the gain for taxable income. Obviously it is much more detailed than this, please do read the bill so you know exactly what to expect regarding your own sales in Oregon.
As, always your comments and questions are appreciated.
Thesa- You may get a surge of sellers with this new law. This could definately add to the expense of selling a home in Oregon.
Thesa – good information to be aware of when it comes time to sell. This could be a big surprise otherwise for many Oregon sellers. – Ashley
Thesa, this makes sense. If they’re out of town sellers, then the home is not a primary residence and subject to capital gains taxes. Hmmm! I can see other states following suit. The IRS even?
Thesa, in Colorado, out of state Sellers have 2% of the sale price withheld, unless they can sign an affidavit saying that there was no gain at all, or if it is owned by a corporation rather than an individual. They are all looking to close loopholes and get every penney they think they are owed!