4 ms·

Paywalled, so I can't read the article, but a funny problem of Boomers owning expensive properties today is that a lot of them can't afford to sell because of c

Paywalled, so I can't read the article, but a funny problem of Boomers owning expensive properties today is that a lot of them can't afford to sell because of capital gains on homes they may have bought 40-50 years ago for <$100,000. If they don't have much wealth besides their home (many homeowners) they won't have enough to move into a new place in their area because everyone else's home has shot up in value as well, and taxes just ate up a hefty portion of the sale from their previous home. So they make do with what they have, property values go up, and a lot of people are unable to buy homes because it doesn't make sense to sell. I'd be interested in seeing, say, a five-year moratorium on capital gains from real estate to see if it helps cool the market.

darth_avocado 2y ago
All I’ll say is, I’ll vote out any government that passes any policy that benefits only the boomers. Consistently influencing policy decisions that only benefited them at each point in their life is why we’re in the mess we’re in. You can’t just change the rules for the game every other generation has been dealing with just because you now have to play it too.
- complaintdept 2y ago
  If it cools the market down it benefits just about everyone except the speculators.
  - darth_avocado 2y ago
    It doesn’t cool the market, only allows people who already have made a lot of money at the expense of others, keep their money while others don’t. Do I get a moratorium on my income taxes?
gareim 2y ago
They can absolutely sell. The first 250k (500k if married) of *profit* is excluded completely from taxes. And then any profits after that are taxed at 0%, 15%, or 20%. If you're making that much money on a sale you're not getting my sympathy that you might pay < 20% of your PROFITS. Get out of here with the pity for the well-off. If they don't need the cash bad enough to sell, then don't sell. If they do, they'll have quite a nest egg after.
kylehotchkiss 2y ago
Interesting idea. Pair it with allowing older home downsizers to maintain their previous taxable value so long as the new property is worth less than the one they are selling. The interest adjustment will still be there but at least the taxes aren’t
willis936 2y ago
>cool the market Do you mean warm it up? It's currently frozen. Lower interest rates are the surest way to fairly warm the market up. Cutting capital gains tax makes the rich richer and the poor poorer. Warming the market won't increase supply though.
- complaintdept 2y ago
  Cool it down, as in, lower real estate prices.
  - willis936 2y ago
    Market hotness is measured in days that a house is on the market, not dollars it sells for. https://fred.stlouisfed.org/tags/series?t=market+hotness# https://fred.stlouisfed.org/tags/series?t=market+hotness#
- bradleyjg 2y ago
  Lower interest rates are the surest way to fairly warm the market up That’ll will unfreeze the market but also resume the insane price spiral. Try building. And not a little bit either. Think Post-WWII.
bradleyjg 2y ago
“Let’s give away more money to people that have already gotten a massive windfall in homes some crumbs fall down to everyone else.” Somehow I’m not enthusiastic about this proposal.
- refurb 2y ago
  Canada does this. 100% of primary home profit is tax free, even if it’s in the millions. They also don’t tax lottery winnings. I’m not a huge fan of high taxes but it would seem to me not taxing either of groups makes and putting the burden on wage earners makes no sense at all.
  - bradleyjg 2y ago
    Lotto winners I can see. Given that it’s a government scheme and they are already making a hefty profit, tax on top seems like double dipping.
    - refurb 2y ago
      Really? It's literally money won through a game. It would seem taxing it heavily makes more sense than telling someone working 40 hours a week at $15/hr they should be paying taxes instead.
      - bradleyjg 2y ago
        If it was a game run by anyone else, sure. But in this case you pay the tax by buying the ticket. FWIW I think it's rather immoral for governments to run lottos to begin with.
        refurb 2y ago
        Sure the government raises some taxes through the lottery, but there is no reason why it can't be more.
nytesky 2y ago
I doubt it would cool the market. Some would argue the $250k/500k capital gains exclusion kicked off the huge runup in housing prices in the 2000s. Suddenly it was a very tax advantaged, leveraged investment. https://www.federalreserve.gov/pubs/feds/2008/200853/ https://www.federalreserve.gov/pubs/feds/2008/200853/ PROP 13 in California probably has similar distortions to the market.
toast0 2y ago
There's already a 250k per person exemption on capital gains from an owner occupied home. If you're married, that's 500k. Certainly, in a lot of places, that doesn't cover growth from a house bought in the 80s, but it will at least make a significant dent in the taxable gain. And it's long term taxable gains, so the rate isn't too high, even if you've got to pay state income tax.
shagie 2y ago
Gift link to get past the paywall - https://www.nytimes.com/2024/04/20/health/seniors-home-equity-mortgages.html?unlocked_article_code=1.rU0.XOJX.cj_iiopGWPmk&smid=url-share https://www.nytimes.com/2024/04/20/health/seniors-home-equit...
charrondev 2y ago
As it’s been explained to me (I just bought my first home), the first 500k of capital gains on a primary residence are tax exempt. FWIW in Canada capital gains on a primary residence are completely tax exempt and their housing market is even more of a mess than in the US.

darth_avocado 2y ago

All I’ll say is, I’ll vote out any government that passes any policy that benefits only the boomers. Consistently influencing policy decisions that only benefited them at each point in their life is why we’re in the mess we’re in. You can’t just change the rules for the game every other generation has been dealing with just because you now have to play it too.

complaintdept 2y ago
If it cools the market down it benefits just about everyone except the speculators.
- darth_avocado 2y ago
  It doesn’t cool the market, only allows people who already have made a lot of money at the expense of others, keep their money while others don’t. Do I get a moratorium on my income taxes?

gareim 2y ago

They can absolutely sell. The first 250k (500k if married) of *profit* is excluded completely from taxes. And then any profits after that are taxed at 0%, 15%, or 20%. If you're making that much money on a sale you're not getting my sympathy that you might pay < 20% of your PROFITS. Get out of here with the pity for the well-off. If they don't need the cash bad enough to sell, then don't sell. If they do, they'll have quite a nest egg after.

kylehotchkiss 2y ago

Interesting idea. Pair it with allowing older home downsizers to maintain their previous taxable value so long as the new property is worth less than the one they are selling. The interest adjustment will still be there but at least the taxes aren’t

willis936 2y ago

>cool the market Do you mean warm it up? It's currently frozen. Lower interest rates are the surest way to fairly warm the market up. Cutting capital gains tax makes the rich richer and the poor poorer. Warming the market won't increase supply though.

complaintdept 2y ago
Cool it down, as in, lower real estate prices.
- willis936 2y ago
  Market hotness is measured in days that a house is on the market, not dollars it sells for. https://fred.stlouisfed.org/tags/series?t=market+hotness# https://fred.stlouisfed.org/tags/series?t=market+hotness#
bradleyjg 2y ago
Lower interest rates are the surest way to fairly warm the market up That’ll will unfreeze the market but also resume the insane price spiral. Try building. And not a little bit either. Think Post-WWII.

bradleyjg 2y ago

“Let’s give away more money to people that have already gotten a massive windfall in homes some crumbs fall down to everyone else.” Somehow I’m not enthusiastic about this proposal.

refurb 2y ago
Canada does this. 100% of primary home profit is tax free, even if it’s in the millions. They also don’t tax lottery winnings. I’m not a huge fan of high taxes but it would seem to me not taxing either of groups makes and putting the burden on wage earners makes no sense at all.
- bradleyjg 2y ago
  Lotto winners I can see. Given that it’s a government scheme and they are already making a hefty profit, tax on top seems like double dipping.
  - refurb 2y ago
    Really? It's literally money won through a game. It would seem taxing it heavily makes more sense than telling someone working 40 hours a week at $15/hr they should be paying taxes instead.
    - bradleyjg 2y ago
      If it was a game run by anyone else, sure. But in this case you pay the tax by buying the ticket. FWIW I think it's rather immoral for governments to run lottos to begin with.
      - refurb 2y ago
        Sure the government raises some taxes through the lottery, but there is no reason why it can't be more.

nytesky 2y ago

I doubt it would cool the market. Some would argue the $250k/500k capital gains exclusion kicked off the huge runup in housing prices in the 2000s. Suddenly it was a very tax advantaged, leveraged investment. https://www.federalreserve.gov/pubs/feds/2008/200853/ https://www.federalreserve.gov/pubs/feds/2008/200853/ PROP 13 in California probably has similar distortions to the market.

toast0 2y ago

There's already a 250k per person exemption on capital gains from an owner occupied home. If you're married, that's 500k. Certainly, in a lot of places, that doesn't cover growth from a house bought in the 80s, but it will at least make a significant dent in the taxable gain. And it's long term taxable gains, so the rate isn't too high, even if you've got to pay state income tax.

shagie 2y ago

Gift link to get past the paywall - https://www.nytimes.com/2024/04/20/health/seniors-home-equity-mortgages.html?unlocked_article_code=1.rU0.XOJX.cj_iiopGWPmk&smid=url-share https://www.nytimes.com/2024/04/20/health/seniors-home-equit...

charrondev 2y ago

As it’s been explained to me (I just bought my first home), the first 500k of capital gains on a primary residence are tax exempt. FWIW in Canada capital gains on a primary residence are completely tax exempt and their housing market is even more of a mess than in the US.