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You're right on 2/3 of those things. Capital gains is never a "cost" to them, they are by definition only going to be taxed on their gains. Real estate agent
by ralusek 9y ago
You're right on 2/3 of those things.
Capital gains is never a "cost" to them, they are by definition only going to be taxed on their gains.
Real estate agent fees, like you said, are based off of the sell value, so unless their commission starts approaching 50% of the value of the house on a 2x gain...they make money. And if their mega-agent charges them 50% of the value of the house, then at least there are no longer any gains to be taxed on :)
The property taxes, however, make sense. Some places lock you in to a certain rate at the purchase price, and they said they bought very low. The argument is that they would be paying more in property taxes for a cheaper house, because they would no longer be locked in to their favorable current rate, which is entire likely given their circumstance.
- opportune 9y agoYou're right, I thought the parent was complaining about higher property taxes, not that property taxes would increase if they were to move to a similarly valued house. That does disincentivize moving into an equally valued house, but moving into that house would have the parent paying about ~2% of X each year in property taxes as opposed to ~1% of X. The appreciation of the house still covers the increase in property taxes for the next 75 years.