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In the US there are numerous incentives for buying a home. Your interest on your mortgage is tax free, the government offers cash back, etc. Renting gives most

In the US there are numerous incentives for buying a home. Your interest on your mortgage is tax free, the government offers cash back, etc. Renting gives most of these incentives to the landlord instead and they aren’t necessarily passed onto the renter. Most importantly, this means that if you have cash to invest, real estate has favorable tax treatment compared to other options so you suddenly have turned housing into a market that must rise decade over decade or the economy will collapse. The way to fix this is painful but it is to revoke all incentives and to make people put down 25-50% as down payments. It will cool the market to near absolute zero short term but it will help long term in keeping housing to actually be housing.

fritztastic 4y ago
Maybe revoke the incentives for those who currently already own multiple properties. No sense in putting an additional financial barrier to people attempting to purchase a home to live in. Investors will be slightly affected by this but it seems like the type of measure that would deter first-time homeowners altogether- therefore exacervating the problem of so many properties being taken by people whose primary interest is profiteering, and leaving those who just want to own the place they live in the dust.
- dexwiz 4y ago
  Many incentives are for first time buyers, or single home buyers. Taxes depend on region, but everywhere I see treats primary homes, secondary homes, and rentals as different classes of real estate. Now that doesn't mean the incentives aren't skewed. But I don't think landlords buying their 20th house are getting the same benefits as a first time buyer.
NovemberWhiskey 4y ago
>Your interest on your mortgage is tax free, the government offers cash back, etc. I have no idea what "the governments offers cash back" means; but certainly the mortgage interest tax deduction is only available for homes in which you actually live for at least part of the year - it's not available for rental properties. You can deduct mortgage interest as an expenses if you're renting a property, but that's exactly the same as any other loan used for a business activity and not specific to real-estate.
lotsofpulp 4y ago
> In the US there are numerous incentives for buying a home. The big one being taxpayer funded 30 year fixed rate mortgages, and subsidizing the existence of 0% and 5% downpayment mortgages. >Your interest on your mortgage is tax free, Literally 90% of US tax filers do not benefit from this, since it requires itemizing. >the government offers cash back, etc. I have not heard of this.
- vecinu 4y ago
  Could you expand on your idea of how taxpayers are subsidizing mortgage rates and downpayments?
- frumper 4y ago
  If you rent out the property the interest is a tax deduction as a business expense. The taxes and insurance are also a tax deduction. You can still take the standard deduction at the personal level. There are a variety of state, local and sometimes federal tax credits or down payment assistance for new home buyers.
coredog64 4y ago
Mortgage interest is only deductible for your primary residence and one other home. Additionally, if you take out a second mortgage/HELOC, it’s only deductible if you use the money to improve the property. There may be additional tax benefits that accrue to a business that is paying interest, but that’s separate from personal deductions.
alexb_ 4y ago
Not to mention all of the tax kickbacks and money that goes to people who buy and develop houses in poorer areas.
beej71 4y ago
> make people put down 25-50% as down payments. I wonder, though, what percentage of buyers this would affect. Lots of houses are behind purchased now with 100% down.
Schroedingersat 4y ago
You don't have to take the benefits away. Just tax ad 50% of land value per year for every residence over 1.1th that anyone owns a stake in. Also treat anyone who doesn't live in the region as if they already have 1 house. Then there'll be plenty of stock.
chrismcb 4y ago
Is this really true? Most incentives I know of are for first time home owners. Most landlords can't take advantage of them.

fritztastic 4y ago

Maybe revoke the incentives for those who currently already own multiple properties. No sense in putting an additional financial barrier to people attempting to purchase a home to live in. Investors will be slightly affected by this but it seems like the type of measure that would deter first-time homeowners altogether- therefore exacervating the problem of so many properties being taken by people whose primary interest is profiteering, and leaving those who just want to own the place they live in the dust.

dexwiz 4y ago
Many incentives are for first time buyers, or single home buyers. Taxes depend on region, but everywhere I see treats primary homes, secondary homes, and rentals as different classes of real estate. Now that doesn't mean the incentives aren't skewed. But I don't think landlords buying their 20th house are getting the same benefits as a first time buyer.

NovemberWhiskey 4y ago

>Your interest on your mortgage is tax free, the government offers cash back, etc. I have no idea what "the governments offers cash back" means; but certainly the mortgage interest tax deduction is only available for homes in which you actually live for at least part of the year - it's not available for rental properties. You can deduct mortgage interest as an expenses if you're renting a property, but that's exactly the same as any other loan used for a business activity and not specific to real-estate.

lotsofpulp 4y ago

> In the US there are numerous incentives for buying a home. The big one being taxpayer funded 30 year fixed rate mortgages, and subsidizing the existence of 0% and 5% downpayment mortgages. >Your interest on your mortgage is tax free, Literally 90% of US tax filers do not benefit from this, since it requires itemizing. >the government offers cash back, etc. I have not heard of this.

vecinu 4y ago
Could you expand on your idea of how taxpayers are subsidizing mortgage rates and downpayments?
frumper 4y ago
If you rent out the property the interest is a tax deduction as a business expense. The taxes and insurance are also a tax deduction. You can still take the standard deduction at the personal level. There are a variety of state, local and sometimes federal tax credits or down payment assistance for new home buyers.

coredog64 4y ago

Mortgage interest is only deductible for your primary residence and one other home. Additionally, if you take out a second mortgage/HELOC, it’s only deductible if you use the money to improve the property. There may be additional tax benefits that accrue to a business that is paying interest, but that’s separate from personal deductions.

alexb_ 4y ago

Not to mention all of the tax kickbacks and money that goes to people who buy and develop houses in poorer areas.

beej71 4y ago

> make people put down 25-50% as down payments. I wonder, though, what percentage of buyers this would affect. Lots of houses are behind purchased now with 100% down.

Schroedingersat 4y ago

You don't have to take the benefits away. Just tax ad 50% of land value per year for every residence over 1.1th that anyone owns a stake in. Also treat anyone who doesn't live in the region as if they already have 1 house. Then there'll be plenty of stock.

chrismcb 4y ago

Is this really true? Most incentives I know of are for first time home owners. Most landlords can't take advantage of them.