3 ms·

There’s nothing wrong with investing by buying homes. Just pay a 75% tax when you do. If you can find places to make money with those taxes, have at it. But

by MBCook 1y ago

There’s nothing wrong with investing by buying homes. Just pay a 75% tax when you do. If you can find places to make money with those taxes, have at it. But you’ll stop messing with normal people’s attempts to buy a house for the most part.

peab 1y ago
Yeah, we definitely still need homes to be available for rent. If you move a lot, or want to be able to move easily and explore different cities or even neighborhoods within a city, renting is way easier than if you'd have to go through the hassle of buying. What sucks is when private companies start owning too many houses and they have unfair advantages over regular folks. For example, they have teams of lawyers.
- deleted 1y ago
  [deleted]
- MBCook 1y ago
  I was suggesting that as a way to prevent purchasing homes to resell for more money. I actually meant it as a tax on the profits from a sale of a house. I completely agree, we need homes for rent at reasonable rates. But I forgot that a lot of the homes that were purchased for investing were purchased to rent out. A 75% tax on the profits from sale wouldn’t help. If it’s 75% on all profits, including rental income, it’ll destroy the rental market. I can’t think of a decent answer off the top of my head. My suggestion was glib, but it was meant for the pretty easy case of just flipping. Trying to control how many houses are purchased versus rented, and how you determine a reasonable rent or prevent that from being abused, is a lot harder.
  - peab 1y ago
    I think there are a few solutions. Having a property tax that goes higher the more properties you have would be a good one (it could be exempt for bigger apartment blocs if that was an issue)
- burnt-resistor 1y ago
  A few or dozens, but not a large fraction of a city by one entity. The tax should be progressive and aggregate with ultimate holding companies/investors so they can't just gamify limits by creating a bunch of shell and holding companies.
BuyMyBitcoins 1y ago
I suggest that any tax on multiple home purchases should scale, and be different depending on whether or not an individual or a corporation is doing the buying.
- MBCook 1y ago
  I wonder about that. If someone’s a billionaire and wants to play around by buying houses? Is that any better than an investment company doing it for the market? How do you tell the difference between a rich person buying their third vacation home and buying a house they intend to sell for profit in a year or two through speculation? Of course, on the other side, I’m aware of companies that own some company housing to let their employees use. How do you tell that from investing? Maybe since they weren’t really doing it to make money they wouldn’t really care that the tax would be high when they sold it if they made a big profit. It all gets really sticky. No special taxes gains on your primary residence, may be a lower tax (that 75% of what’s er) on a secondary residence. But pretty quickly if you have that many houses personally you can probably afford to pay a high tax on gains. You’re not really what we want to optimize the market for anyway. I just guessed at a big number. Maybe it should be 50%. Maybe it should be 90%. I have no idea. It seems like it should be legal, there have got to be cases where it might be useful. Buying and flipping houses from dilapidated neighborhood by turning it into something better. I’m at the age where I wouldn’t mind a house. But they’re all gigantic, expensive, or both in my area. I have no idea how a normal family is ever supposed to afford one.
  - lazide 1y ago
    As the boomers start dying off in larger waves, a lot of inventory will start getting onto the market.
    - paulryanrogers 1y ago
      Investor money may just soak it all up though, especially as certain policies make other avenues less stable. And unlike Boomers, corporations can live forever. Permanently raising the ladder.
kelipso 1y ago
There’s lots wrong with buying up homes for investing so that prices of homes go up and people can’t afford homes. It’s some kind of flawed myopic morality that says there’s nothing wrong with it.
- lazide 1y ago
  People aren’t “buying up homes for investing so that prices of homes go up and people can’t afford homes.” That may be an aggregate and long term effect, but i’ve never seen anyone actually motivated by something like that. At least not statistically. People with excess money (often dentists, doctors, middle managers, small business owners, etc), who don’t trust stocks or the banks, are buying houses because they think they can rent them to people for cashflow in the future (aka not have to eat dogfood!), or rent them out now to other people for money. People that otherwise couldn’t be in these houses, or those people would be buying them instead. Aka put their money to work. IMO, people doing that right now are going to lose their shirts, but that is risk/reward. I could be wildly wrong.
  - blindriver 1y ago
    Why do you think they will lose their shirts
    - potato3732842 1y ago
      When everyone gets sick of it and votes for punitive taxes on residential property that is not owner occupied. I would prefer they deregulate the living shit out of constructing additional housing so all the small money can get into that (i.e. something productive instead of literal rent seeking) instead but I am not hopeful.
      - dboreham 1y ago
        This has happened in places like Scotland but I doubt it'll happen in the US. And if it did, courts would strike the law on the grounds "can't take property".
xphos 1y ago
I don't think you understand who the tax hurts in that case. If investors can pass that tax off to a renter, than this type of policy just hurts renters. It seems similar to rent to control its great if you own a house but you ultimually create a shortage that has a lot more slient unknown victims. The real solution is to just build more housing in places people want it so that renting it becomes insanely cheap because there is a glut of supply. It also drives the cost of houses down but I think that might be for the better despite hurting my bottom line as a single family house owner
- danaris 1y ago
  This is a classic fallacy trotted out every time someone suggests taxing the rich/corporations/landlords more. "Oh, you can't do that, they'll just pass on the costs to consumers and keep their margins the same! Really, when you raise taxes on the wealthy, the only people you're hurting are the little people!!" But evidence doesn't bear that out. Real economics are more complex than that, and especially given how things are right now, people can't afford more expensive homes, so trying to pass on additional costs is going to sharply reduce your available market.
  - MBCook 1y ago
    I agree with you. But let’s just say the comment you’re replying to is correct. They’ll pass it on to their renters. Ok. Good. That’s why we have to make it high enough. If you put a 10% tax on them they’ll just raise rents 10% (or more). I agree. If you put a 75% tax on them, they’ll have to charge so much money that they’ll have a very hard time getting renters at all. Pretty soon that property is useless to an investor, but can be sold to a normal person and work just fine. — My suggestion was actually designed for just buying houses in hopes of reselling them. Buying them for rentals had not occurred to me, but I do know that’s a very common thing. It should have. If the tax is high enough that you can’t make the business case work out, they won’t do it. And since it doesn’t apply to home owners on a primary residence that house is still perfectly good for anyone who would like to live there.
    - 1y ago
9cb14c1ec0 1y ago
Or maybe have such a large housing supply that supply drives down profits to where large investors look elsewhere.
dennis_jeeves2 1y ago
>Just pay a 75% tax when you do. Make it 100.
- MBCook 1y ago
  I’m a bit concerned that not allowing this it all would have some sort of perverse effect that I’m not for seeing. I’m not in the real estate industry so I’m sure there’s things I don’t know about. So I picked a really big number to dissuade it, but left open the possibility.
  - dennis_jeeves2 1y ago
    I was being sarcastic. taxes are rarely a good solution to our ills, because you are enabling tyranny from the gvt. And yes there are places/situations where taxes have exceed 100%.

by MBCook 1y ago

peab 1y ago

Yeah, we definitely still need homes to be available for rent. If you move a lot, or want to be able to move easily and explore different cities or even neighborhoods within a city, renting is way easier than if you'd have to go through the hassle of buying. What sucks is when private companies start owning too many houses and they have unfair advantages over regular folks. For example, they have teams of lawyers.

deleted 1y ago
[deleted]
MBCook 1y ago
I was suggesting that as a way to prevent purchasing homes to resell for more money. I actually meant it as a tax on the profits from a sale of a house. I completely agree, we need homes for rent at reasonable rates. But I forgot that a lot of the homes that were purchased for investing were purchased to rent out. A 75% tax on the profits from sale wouldn’t help. If it’s 75% on all profits, including rental income, it’ll destroy the rental market. I can’t think of a decent answer off the top of my head. My suggestion was glib, but it was meant for the pretty easy case of just flipping. Trying to control how many houses are purchased versus rented, and how you determine a reasonable rent or prevent that from being abused, is a lot harder.
- peab 1y ago
  I think there are a few solutions. Having a property tax that goes higher the more properties you have would be a good one (it could be exempt for bigger apartment blocs if that was an issue)
burnt-resistor 1y ago
A few or dozens, but not a large fraction of a city by one entity. The tax should be progressive and aggregate with ultimate holding companies/investors so they can't just gamify limits by creating a bunch of shell and holding companies.

BuyMyBitcoins 1y ago

I suggest that any tax on multiple home purchases should scale, and be different depending on whether or not an individual or a corporation is doing the buying.

MBCook 1y ago
I wonder about that. If someone’s a billionaire and wants to play around by buying houses? Is that any better than an investment company doing it for the market? How do you tell the difference between a rich person buying their third vacation home and buying a house they intend to sell for profit in a year or two through speculation? Of course, on the other side, I’m aware of companies that own some company housing to let their employees use. How do you tell that from investing? Maybe since they weren’t really doing it to make money they wouldn’t really care that the tax would be high when they sold it if they made a big profit. It all gets really sticky. No special taxes gains on your primary residence, may be a lower tax (that 75% of what’s er) on a secondary residence. But pretty quickly if you have that many houses personally you can probably afford to pay a high tax on gains. You’re not really what we want to optimize the market for anyway. I just guessed at a big number. Maybe it should be 50%. Maybe it should be 90%. I have no idea. It seems like it should be legal, there have got to be cases where it might be useful. Buying and flipping houses from dilapidated neighborhood by turning it into something better. I’m at the age where I wouldn’t mind a house. But they’re all gigantic, expensive, or both in my area. I have no idea how a normal family is ever supposed to afford one.
- lazide 1y ago
  As the boomers start dying off in larger waves, a lot of inventory will start getting onto the market.
  - paulryanrogers 1y ago
    Investor money may just soak it all up though, especially as certain policies make other avenues less stable. And unlike Boomers, corporations can live forever. Permanently raising the ladder.

kelipso 1y ago

There’s lots wrong with buying up homes for investing so that prices of homes go up and people can’t afford homes. It’s some kind of flawed myopic morality that says there’s nothing wrong with it.

lazide 1y ago
People aren’t “buying up homes for investing so that prices of homes go up and people can’t afford homes.” That may be an aggregate and long term effect, but i’ve never seen anyone actually motivated by something like that. At least not statistically. People with excess money (often dentists, doctors, middle managers, small business owners, etc), who don’t trust stocks or the banks, are buying houses because they think they can rent them to people for cashflow in the future (aka not have to eat dogfood!), or rent them out now to other people for money. People that otherwise couldn’t be in these houses, or those people would be buying them instead. Aka put their money to work. IMO, people doing that right now are going to lose their shirts, but that is risk/reward. I could be wildly wrong.
- blindriver 1y ago
  Why do you think they will lose their shirts
  - potato3732842 1y ago
    When everyone gets sick of it and votes for punitive taxes on residential property that is not owner occupied. I would prefer they deregulate the living shit out of constructing additional housing so all the small money can get into that (i.e. something productive instead of literal rent seeking) instead but I am not hopeful.
    - dboreham 1y ago
      This has happened in places like Scotland but I doubt it'll happen in the US. And if it did, courts would strike the law on the grounds "can't take property".

xphos 1y ago

I don't think you understand who the tax hurts in that case. If investors can pass that tax off to a renter, than this type of policy just hurts renters. It seems similar to rent to control its great if you own a house but you ultimually create a shortage that has a lot more slient unknown victims. The real solution is to just build more housing in places people want it so that renting it becomes insanely cheap because there is a glut of supply. It also drives the cost of houses down but I think that might be for the better despite hurting my bottom line as a single family house owner

danaris 1y ago
This is a classic fallacy trotted out every time someone suggests taxing the rich/corporations/landlords more. "Oh, you can't do that, they'll just pass on the costs to consumers and keep their margins the same! Really, when you raise taxes on the wealthy, the only people you're hurting are the little people!!" But evidence doesn't bear that out. Real economics are more complex than that, and especially given how things are right now, people can't afford more expensive homes, so trying to pass on additional costs is going to sharply reduce your available market.
- MBCook 1y ago
  I agree with you. But let’s just say the comment you’re replying to is correct. They’ll pass it on to their renters. Ok. Good. That’s why we have to make it high enough. If you put a 10% tax on them they’ll just raise rents 10% (or more). I agree. If you put a 75% tax on them, they’ll have to charge so much money that they’ll have a very hard time getting renters at all. Pretty soon that property is useless to an investor, but can be sold to a normal person and work just fine. — My suggestion was actually designed for just buying houses in hopes of reselling them. Buying them for rentals had not occurred to me, but I do know that’s a very common thing. It should have. If the tax is high enough that you can’t make the business case work out, they won’t do it. And since it doesn’t apply to home owners on a primary residence that house is still perfectly good for anyone who would like to live there.
  - 1y ago

9cb14c1ec0 1y ago

Or maybe have such a large housing supply that supply drives down profits to where large investors look elsewhere.

dennis_jeeves2 1y ago

>Just pay a 75% tax when you do. Make it 100.

MBCook 1y ago
I’m a bit concerned that not allowing this it all would have some sort of perverse effect that I’m not for seeing. I’m not in the real estate industry so I’m sure there’s things I don’t know about. So I picked a really big number to dissuade it, but left open the possibility.
- dennis_jeeves2 1y ago
  I was being sarcastic. taxes are rarely a good solution to our ills, because you are enabling tyranny from the gvt. And yes there are places/situations where taxes have exceed 100%.