4 ms·

Calling someone who lives in a house a 'real estate investor' and 'squatting on assets' is truly odd to me. I don't mean to misquote you, and apologies if so,

Calling someone who lives in a house a 'real estate investor' and 'squatting on assets' is truly odd to me. I don't mean to misquote you, and apologies if so, but you seem to have decided that homes should be rented and not owned. If that's your viewpoint, fine. I don't agree with it at all, and I'll go and live somewhere in which ownership of property is permitted. I wish you the best of luck with whatever you're trying to do in your corner of the world.

closeparen 8y ago
US politicians in the postwar era were very concerned about having a proletariat on their hands, and embarked on a program of mass homeownership to make little capitalists of us all. It worked. A bit too well. Owning a house while it appreciates is less socially useful than working or investing in productive businesses, and sometimes more lucrative. Why should it be taxed at a lower rate? If it’s not an investment, what do you care about the return? I appreciate that lots of people like suburbia, and I wish them well too. Only that government policy will also allow urbanism to thrive.
- esotericn 8y ago
  > Owning a house while it appreciates is less socially useful than working or investing in productive businesses, and sometimes more lucrative. Why should it be taxed at a lower rate? In the UK, real estate investors are taxed. A significant number of individuals here believe they should be taxed more. A family or individual living in their single home (whether it be a house, apartment, shed, or whatever else) are not real estate investors. Very few people believe they should be paying taxes on their primary residence. So, yes, a businessman, conglomerate, or just an 'accidental landlord' who owns a building and derives rent from it in perpetuity is taxed in a different way to someone who just lives in and owns their primary home; people want that to be the case, and for the most part it is. (We have our share of loopholes as every taxation system does). Is it different in the US? It feels like I'm missing something fundamentally obvious in our discussion here, so maybe that's it?
  - closeparen 8y ago
    In the US, you can deduct your mortgage interest and pocket 100% of your profit upon sale. In a place like California with property tax assessments frozen upon purchase, the explosion of housing prices is pure tax-free upside. You don’t get that kind of deal from stocks or bonds. So people pay more than they otherwise would for houses, and are more incentivized than they otherwise would be to keep housing prices high. As a side effect, municipal tax revenues don’t scale with the now-inflated costs of provisioning municipal services. My larger point is that either a) your house is an investment, so your returns come with social responsibilities, or b) your house is not an investment, so you’re not entitled to returns beyond having a place to live. The current regime, where you can make tax-free millions for being in the right place at the right time, is not a good one.
    - esotericn 8y ago
      > your house is not an investment, so you’re not entitled to returns beyond having a place to live. The current regime, where you can make tax-free millions for being in the right place at the right time, is not a good one. I agree with this. In the UK - as earlier stated, we don't have property tax. No capital gains tax is charged on disposal of a primary residence. The CGT situation makes sense in the event that the entirety of the gain is re-invested in another home. Otherwise, you end up in the absurd situation in which a person moving between two identical homes on the same street would take a loss of 20%, incentivising them to never move. It might make sense to require that the proceeds of the sale be put towards another primary private residence (and have anything left over taxed). It seems to me like that's not really your issue though. > As a side effect, municipal tax revenues don’t scale with the now-inflated costs of provisioning municipal services. This is a question of overall taxation, no? It's not relevant whether the money comes from a property tax on everyone, or an income tax on those that are of working age, or a general wealth tax, or corporation tax, or whatever else - it just needs to be paid for. Again, I'm assuming here, but I think your argument is that increasing property taxes would decrease the cost of property. It's pretty obvious that this is the case because it's effectively turning homeownership into a 'shared ownership' scenario whereby you pay rent to the state.

closeparen 8y ago

US politicians in the postwar era were very concerned about having a proletariat on their hands, and embarked on a program of mass homeownership to make little capitalists of us all. It worked. A bit too well. Owning a house while it appreciates is less socially useful than working or investing in productive businesses, and sometimes more lucrative. Why should it be taxed at a lower rate? If it’s not an investment, what do you care about the return? I appreciate that lots of people like suburbia, and I wish them well too. Only that government policy will also allow urbanism to thrive.

esotericn 8y ago
> Owning a house while it appreciates is less socially useful than working or investing in productive businesses, and sometimes more lucrative. Why should it be taxed at a lower rate? In the UK, real estate investors are taxed. A significant number of individuals here believe they should be taxed more. A family or individual living in their single home (whether it be a house, apartment, shed, or whatever else) are not real estate investors. Very few people believe they should be paying taxes on their primary residence. So, yes, a businessman, conglomerate, or just an 'accidental landlord' who owns a building and derives rent from it in perpetuity is taxed in a different way to someone who just lives in and owns their primary home; people want that to be the case, and for the most part it is. (We have our share of loopholes as every taxation system does). Is it different in the US? It feels like I'm missing something fundamentally obvious in our discussion here, so maybe that's it?
- closeparen 8y ago
  In the US, you can deduct your mortgage interest and pocket 100% of your profit upon sale. In a place like California with property tax assessments frozen upon purchase, the explosion of housing prices is pure tax-free upside. You don’t get that kind of deal from stocks or bonds. So people pay more than they otherwise would for houses, and are more incentivized than they otherwise would be to keep housing prices high. As a side effect, municipal tax revenues don’t scale with the now-inflated costs of provisioning municipal services. My larger point is that either a) your house is an investment, so your returns come with social responsibilities, or b) your house is not an investment, so you’re not entitled to returns beyond having a place to live. The current regime, where you can make tax-free millions for being in the right place at the right time, is not a good one.
  - esotericn 8y ago
    > your house is not an investment, so you’re not entitled to returns beyond having a place to live. The current regime, where you can make tax-free millions for being in the right place at the right time, is not a good one. I agree with this. In the UK - as earlier stated, we don't have property tax. No capital gains tax is charged on disposal of a primary residence. The CGT situation makes sense in the event that the entirety of the gain is re-invested in another home. Otherwise, you end up in the absurd situation in which a person moving between two identical homes on the same street would take a loss of 20%, incentivising them to never move. It might make sense to require that the proceeds of the sale be put towards another primary private residence (and have anything left over taxed). It seems to me like that's not really your issue though. > As a side effect, municipal tax revenues don’t scale with the now-inflated costs of provisioning municipal services. This is a question of overall taxation, no? It's not relevant whether the money comes from a property tax on everyone, or an income tax on those that are of working age, or a general wealth tax, or corporation tax, or whatever else - it just needs to be paid for. Again, I'm assuming here, but I think your argument is that increasing property taxes would decrease the cost of property. It's pretty obvious that this is the case because it's effectively turning homeownership into a 'shared ownership' scenario whereby you pay rent to the state.