4 ms·
> > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. > That’s not how property taxes work. You pay them whether you make
by pwg 6y ago
> > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that.
> That’s not how property taxes work. You pay them whether you make money on the house or not.
> You only make money on a house when you sell it.
You are correct in that you do not (yet) have cash in hand from the value increase of the property. So if one defines "make money" as "have cash in hand", no money is made until one sells the property.
But, what one does have in this situation is an unrealized capital gain. And if one defines "make money" to include unrealized capital gains, then the homeowner has "made money" -- they just do not yet have cash in hand.
- zepto 6y ago> unrealized capital gain Unrealized is the operative word here. It means not achieved or created. An unrealized capital gain can become an unrealized loss. That’s because it’s not a real gain. Leveraging unrealized gains through loans is universally recognized as a risky investment strategy. This policy would force people to take on this risk. Which is exactly the point I’m making. Homeowners shouldn’t be forced to take on risky financial instruments that are tied to the performance of local businesses.
- lotsofpulp 6y agoIn a discussion about paying property taxes, which must be done with cash, what purpose would it serve to define unrealized capital gains as “make money”?