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It’s subsidized regardless. There are countless tax incentives for homeowners.

deleted 4y ago
[deleted]
lotsofpulp 4y ago
I was referring to taxpayers subsidizing the actual loan itself, not the act of owning a home. What are the tax incentives (in the US)? On a federal level, all I can think of is mortgage interest tax deduction, but that was greatly neutered in 2017 TCJA, and less than 10% of Americans can benefit from it. And that is a tax incentive to borrow money to buy a home, not a tax incentive for home owners. Only other one is 1031 exchange, but that is rarely needed for typical homeowners and is available to all real estate owners. On a state/local level, I guess there are some locales with property tax adjustments, but other than that, I cannot come up with any.
- zacherates 4y ago
  The biggest tax benefit of living in an owner occupied home is that nobody pays income tax on the rent you would pay if you were living in a house someone else owned. ... but most places don't have the stones to tax imputed rent [1]: Belgium, Iceland, Luxembourg, the Netherlands, Slovenia, Spain and Switzerland being exceptions. [1] https://en.m.wikipedia.org/wiki/Imputed_rent https://en.m.wikipedia.org/wiki/Imputed_rent
  - briandear 4y ago
    Taxing imputed rent? That’s ridiculous. Taxing income someone might have made? Some people and countries want the government to have far too much power. If someone decides not to work, should we tax the income they could have made?
  - pooper 4y ago
    If the choices are between implementing tax on imputed rent and killing all economists by boiling them all alive, I'll gladly start gathering firewood. I'm just joking. I am all for higher taxes on everyone. I have one condition though. If I should pay tax on imputed rent, then Google and Facebook should pay taxes everytime someone clicks on a sponsored link that takes them to their own property. Every time I bring up this idea that companies must pay taxes on funny money they spend within the organization, people yell at me. Microsoft should pay taxes Windows licenses that they use internally. No, you can't give yourself a "discount" and say well we charged ourselves zero dollars so we owe no taxes. Pay taxes on the market rate. Either make it free of cost for everyone or pay taxes when you use things internally.
    - briandear 4y ago
      > I am all for higher taxes on everyone. Why? Taxes should be the minimum required to provide for the core services of government. Big governments are dangerous. Also taxes have deadweight loss.
    - andsoitis 4y ago
      > No, you can't give yourself a "discount" and say well we charged ourselves zero dollars so we owe no taxes. Pay taxes on the market rate. Either make it free of cost for everyone or pay taxes when you use things internally. Could they just say we "licensed/sold" it at a loss, and therefore take a tax deduction?
  - lotsofpulp 4y ago
    I do not understand this reasoning. Especially because everywhere has property taxes, which sound like the same thing.
- kasey_junk 4y ago
  The biggest subsidy is Fannie/Freddie buying 30 year mortgages with the now explicit backing of the Federal government. If that didn’t exist there wouldn’t be 30 year mortgages. How that distorts the real estate market is a big open question but my guess is it drives up real estate prices. Of course that has been a continuous policy decision for almost 100 years so it’s nothing new.
  - lotsofpulp 4y ago
    For sure, the low cost mortgages cause prices to be much higher.
- HWR_14 4y ago
  If you sell an owner-occupied house (something like primary residence for 3 years) your first $500k of capital gains aren't taxed.
  - lotsofpulp 4y ago
    This is a good example I forgot.

deleted 4y ago

[deleted]

I was referring to taxpayers subsidizing the actual loan itself, not the act of owning a home. What are the tax incentives (in the US)? On a federal level, all I can think of is mortgage interest tax deduction, but that was greatly neutered in 2017 TCJA, and less than 10% of Americans can benefit from it. And that is a tax incentive to borrow money to buy a home, not a tax incentive for home owners. Only other one is 1031 exchange, but that is rarely needed for typical homeowners and is available to all real estate owners. On a state/local level, I guess there are some locales with property tax adjustments, but other than that, I cannot come up with any.

zacherates 4y ago
The biggest tax benefit of living in an owner occupied home is that nobody pays income tax on the rent you would pay if you were living in a house someone else owned. ... but most places don't have the stones to tax imputed rent [1]: Belgium, Iceland, Luxembourg, the Netherlands, Slovenia, Spain and Switzerland being exceptions. [1] https://en.m.wikipedia.org/wiki/Imputed_rent https://en.m.wikipedia.org/wiki/Imputed_rent
- briandear 4y ago
  Taxing imputed rent? That’s ridiculous. Taxing income someone might have made? Some people and countries want the government to have far too much power. If someone decides not to work, should we tax the income they could have made?
- pooper 4y ago
  If the choices are between implementing tax on imputed rent and killing all economists by boiling them all alive, I'll gladly start gathering firewood. I'm just joking. I am all for higher taxes on everyone. I have one condition though. If I should pay tax on imputed rent, then Google and Facebook should pay taxes everytime someone clicks on a sponsored link that takes them to their own property. Every time I bring up this idea that companies must pay taxes on funny money they spend within the organization, people yell at me. Microsoft should pay taxes Windows licenses that they use internally. No, you can't give yourself a "discount" and say well we charged ourselves zero dollars so we owe no taxes. Pay taxes on the market rate. Either make it free of cost for everyone or pay taxes when you use things internally.
  - briandear 4y ago
    > I am all for higher taxes on everyone. Why? Taxes should be the minimum required to provide for the core services of government. Big governments are dangerous. Also taxes have deadweight loss.
  - andsoitis 4y ago
    > No, you can't give yourself a "discount" and say well we charged ourselves zero dollars so we owe no taxes. Pay taxes on the market rate. Either make it free of cost for everyone or pay taxes when you use things internally. Could they just say we "licensed/sold" it at a loss, and therefore take a tax deduction?
- lotsofpulp 4y ago
  I do not understand this reasoning. Especially because everywhere has property taxes, which sound like the same thing.
kasey_junk 4y ago
The biggest subsidy is Fannie/Freddie buying 30 year mortgages with the now explicit backing of the Federal government. If that didn’t exist there wouldn’t be 30 year mortgages. How that distorts the real estate market is a big open question but my guess is it drives up real estate prices. Of course that has been a continuous policy decision for almost 100 years so it’s nothing new.
- lotsofpulp 4y ago
  For sure, the low cost mortgages cause prices to be much higher.
HWR_14 4y ago
If you sell an owner-occupied house (something like primary residence for 3 years) your first $500k of capital gains aren't taxed.
- lotsofpulp 4y ago
  This is a good example I forgot.