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Classic loophole. We tell ourselves this is to protect the little people who own homes, but the actual little people don’t have homes at all and rent. Meanwhil

Classic loophole. We tell ourselves this is to protect the little people who own homes, but the actual little people don’t have homes at all and rent. Meanwhile, anyone with money will get the picture invest all of it in real estate, once again enriching homeowner as well impoverishing the rest of us.

bongodongobob 11mo ago
Only 29% of people in the Netherlands rent and that number is decreasing.
- appreciatorBus 11mo ago
  Yes, exactly, this policy will result in 29% of people who don’t own real subsidizing the 70% who do.
tempestn 11mo ago
In a way I agree with you that this will cause market distortion in the form of greater demand for real estate over eg. equities. But there are plenty of such tax distortions; for example many countries have favourable tax treatment for domestic dividends. Regardless, I assume the logic behind this exception is that while you can easily sell a portion of your holdings of publicly traded stocks to cover your annual tax burden, you can't sell a portion of a house. You could of course finance, but that's going to disproportionately benefit lenders.
icegreentea2 11mo ago
It's true that it's a carve out, and current young generations are having huge problems getting homes in a lot of the world. But in the Netherlands, the overall home ownership rate is still about 70 percent (https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__custom_19156616/default/table?page=time:2023 https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__c... might need to drill down a little). In the US it's 65 percent. Carve outs for home owners are some of the most understandable political strategies across the developed world.
- appreciatorBus 11mo ago
  I totally get that it’s an understandable political strategy. I just think it’s in defensible as anything but a political strategy, and that it will ultimately make life worse for more people versus simply treating assets as assets, including homes. If homeowners do not wish their homes to be treated as assets, then they could simply forgo the right to profits, but I suspect they will not do that.
  - maxldn 11mo ago
    While I don’t disagree, I think it’s worth noting that the Netherlands has a pretty good level of social housing. Not perfect, but I think it’s 26% based on the stats link in the parent. Also rent controls. Although these also tend to reward people who have been in the system longer (which _might_ be by design, but that’s just like my opinion)
    - appreciatorBus 11mo ago
      Social housing and rent controls are not a substitute for basic tax fairness. Of course, as a political tactic, it’s a great way to distract from tilting the entire tax system toward those who already have the most rather than trying to at least try to achieve some sort of a level playing field.
alexanderchr 11mo ago
Home ownership is and would continue be taxed in box 1, so that’s not even superficially the reason for carving out real estate. Box 3 on real estate only come in play for home 2+, and rental properties.

bongodongobob 11mo ago

Only 29% of people in the Netherlands rent and that number is decreasing.

appreciatorBus 11mo ago
Yes, exactly, this policy will result in 29% of people who don’t own real subsidizing the 70% who do.

tempestn 11mo ago

In a way I agree with you that this will cause market distortion in the form of greater demand for real estate over eg. equities. But there are plenty of such tax distortions; for example many countries have favourable tax treatment for domestic dividends. Regardless, I assume the logic behind this exception is that while you can easily sell a portion of your holdings of publicly traded stocks to cover your annual tax burden, you can't sell a portion of a house. You could of course finance, but that's going to disproportionately benefit lenders.

icegreentea2 11mo ago

It's true that it's a carve out, and current young generations are having huge problems getting homes in a lot of the world. But in the Netherlands, the overall home ownership rate is still about 70 percent (https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__custom_19156616/default/table?page=time:2023 https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__c... might need to drill down a little). In the US it's 65 percent. Carve outs for home owners are some of the most understandable political strategies across the developed world.

appreciatorBus 11mo ago
I totally get that it’s an understandable political strategy. I just think it’s in defensible as anything but a political strategy, and that it will ultimately make life worse for more people versus simply treating assets as assets, including homes. If homeowners do not wish their homes to be treated as assets, then they could simply forgo the right to profits, but I suspect they will not do that.
- maxldn 11mo ago
  While I don’t disagree, I think it’s worth noting that the Netherlands has a pretty good level of social housing. Not perfect, but I think it’s 26% based on the stats link in the parent. Also rent controls. Although these also tend to reward people who have been in the system longer (which _might_ be by design, but that’s just like my opinion)
  - appreciatorBus 11mo ago
    Social housing and rent controls are not a substitute for basic tax fairness. Of course, as a political tactic, it’s a great way to distract from tilting the entire tax system toward those who already have the most rather than trying to at least try to achieve some sort of a level playing field.

alexanderchr 11mo ago

Home ownership is and would continue be taxed in box 1, so that’s not even superficially the reason for carving out real estate. Box 3 on real estate only come in play for home 2+, and rental properties.