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If your house didn't appreciate you would not have any profits either. Very confused on what the issue is. Let's say your house is 1mn and stays 1mn. You have
by dmode 9y ago
If your house didn't appreciate you would not have any profits either. Very confused on what the issue is.
Let's say your house is 1mn and stays 1mn. You have zero gains and pay zero taxes. Net cash in your bank = ZERO
Now your house becomes 2mn. So you have 1mn profit, first 500K is exempt. And you pay 25% on your next 500k. Net cash = 750K.
Are you suggesting that you would rather have zero dollars in your bank account than 750 K?
- wott 9y agoHe does not want to fill his bank account and be homeless. He wants a house. To be bought with the same money. That does not go into the bank account but into the new house.
- Retric 9y agoYou can use that 750,000$ to buy anywhere else that's not inflated. If you want to buy a house in an inflated area you end up in the same situation as anyone else that wants to buy a house in an inflated area. AKA, if a prison opened up next to their current house keeping property values the same then they would be strictly worse off.
- megy 9y agoHe has the original $1m to buy a house.
- taysic 9y agoI think the issue is that if housing prices hadn't gone up, they could buy a house of equal price without triggering capital gains. So if your house is 1m and 10 years later stays at 1m, then you can swap for any other house in the neighborhood. If your house was 1m but in 10 years becomes 2m, and all the other houses in the neighborhood are now 2m... you would hypothetically not be able to swap for another home. You now have 1.75m to buy with. A good problem to have, no doubt.