| ▲ | energy123 8 hours ago |
| A bad idea in isolation, because it forces people to store all their net worth into their main tax free house, causing people to squat in gigantic houses that they don't need or want. I've seen this distorted behavior in people I know. We should reward the person who lives in a normal house below their means, and buys an apartment as an investment (which is private capital into new construction that wouldn't have happened if they didn't do it), then rents it out, which increases stock on the rental market, and decreases rental yields. If you want to tax ALL housing the same, including people's only house, then sure, go for it. Or better yet, tax all land ownership. Just don't distort people's behavior by making a special exception for their main house. |
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| ▲ | cassianoleal 7 hours ago | parent | next [-] |
| > store all their net worth into their main tax free house If you take speculation out of the housing market, storing net worth in your main house becomes a lot less attractive. |
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| ▲ | Esophagus4 7 hours ago | parent [-] | | Which was the way housing was for many years. A house used to be viewed as a consumable good a hundred years ago, not an appreciating asset. (Before the New Deal commoditized mortgages) | | |
| ▲ | mothballed 6 hours ago | parent [-] | | At least in USA, since pretty much the absolute beginning, anyone with any wealth tried to gobble up the absolute most amount of land they could. Both as a form of wealth and a productive input. This has been less so in the past century though as agriculture has become smaller part of the economy. |
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| ▲ | gdulli 7 hours ago | parent | prev | next [-] |
| Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still include the real estate sector? |
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| ▲ | energy123 7 hours ago | parent | next [-] | | For tax efficiency. The US, UK and many other countries have variations on this theme that the house you live in is taxed less than stocks, bonds or second properties. This creates a distortion where people buy the biggest house they can afford, because everything else gets taxed. | |
| ▲ | Esophagus4 7 hours ago | parent | prev [-] | | From people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account. Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value. | | |
| ▲ | sidewndr46 7 hours ago | parent [-] | | This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains. | | |
| ▲ | Esophagus4 6 hours ago | parent [-] | | But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :) I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting… | | |
| ▲ | sidewndr46 6 hours ago | parent [-] | | I'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA | | |
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| ▲ | Ntrails 7 hours ago | parent | prev | next [-] |
| > people to squat in gigantic houses that they don't need In the Uk, at least, stamp duty is an obvious and infuriating driver of either buying big early or never downsizing. I did the former, parents do the latter. Easy to solve the incentive problem yet we never will |
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| ▲ | cindyllm 8 hours ago | parent | prev [-] |
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