4 ms·

A bad idea in isolation, because it forces people to store all their net worth into their main tax free house, causing people to squat in gigantic houses that t

A bad idea in isolation, because it forces people to store all their net worth into their main tax free house, causing people to squat in gigantic houses that they don't need or want. I've seen this distorted behavior in people I know. We should reward the person who lives in a normal house below their means, and buys an apartment as an investment (which is private capital into new construction that wouldn't have happened if they didn't do it), then rents it out, which increases stock on the rental market, and decreases rental yields. If you want to tax ALL housing the same, including people's only house, then sure, go for it. Or better yet, tax all land ownership. Just don't distort people's behavior by making a special exception for their main house.

cindyllm 6mo ago
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cassianoleal 6mo ago
> store all their net worth into their main tax free house If you take speculation out of the housing market, storing net worth in your main house becomes a lot less attractive.
- Esophagus4 6mo ago
  Which was the way housing was for many years. A house used to be viewed as a consumable good a hundred years ago, not an appreciating asset. (Before the New Deal commoditized mortgages)
  - mothballed 6mo ago
    At least in USA, since pretty much the absolute beginning, anyone with any wealth tried to gobble up the absolute most amount of land they could. Both as a form of wealth and a productive input. This has been less so in the past century though as agriculture has become smaller part of the economy.
    - kelipso 6mo ago
      That should be highly discouraged since land is a scarce resource. Property should be taxed exponentially with respect to how much you already own.
      - bpt3 6mo ago
        Why? Presumably you mean desirable land is scarce, which is true by definition, but land in the US is far from scarce.
        kelipso 6mo ago
        Put a few mile ring around any city center and yes the land there is scarce. You would not want one or a small number of individuals buying up all or a lot of that land because other people want to live there too. Therefore do exponential taxation based on land they already own. Why is this confusing to you?
        bpt3 6mo ago
        For one, you're solving a non-problem in the US and creating new problems. Why do you think people are hoarding land today that could be used for housing developments and leaving it empty? What is "too much" land that would subject it to your exponential taxation?
        kelipso 6mo ago
        There are a large number of properties in big cities sitting empty due to people hoarding land/houses. Too much is anything more than your primary residence. It should be taxed exponentially with both number of secondary residences and size normalized to urban development around the property.
        bpt3 5mo ago
        Cities in vacation spots have vacant homes, but most "big cities" do not, and vacation homes are not an example of hoarding. In short, you're just making things up. I'm glad you aren't in charge, though there are a concerning number of people with your mindset.
gdulli 6mo ago
Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still include the real estate sector?
- Esophagus4 6mo ago
  From people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account. Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value.
  - sidewndr46 6mo ago
    This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.
    - Esophagus4 6mo ago
      But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :) I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…
      - sidewndr46 6mo ago
        I'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA
        Esophagus4 6mo ago
        Yes, just having fun :)
Ntrails 6mo ago
> people to squat in gigantic houses that they don't need In the Uk, at least, stamp duty is an obvious and infuriating driver of either buying big early or never downsizing. I did the former, parents do the latter. Easy to solve the incentive problem yet we never will
croon 5mo ago
Your entire argument rests on housing being a speculative investment. The thread is about envisioning a scenario where that isn't the case. If someone lives in a modest house and have further assets, there are many many (speculative) stores for that net worth that isn't housing.

cindyllm 6mo ago

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cassianoleal 6mo ago

> store all their net worth into their main tax free house If you take speculation out of the housing market, storing net worth in your main house becomes a lot less attractive.

Esophagus4 6mo ago
Which was the way housing was for many years. A house used to be viewed as a consumable good a hundred years ago, not an appreciating asset. (Before the New Deal commoditized mortgages)
- mothballed 6mo ago
  At least in USA, since pretty much the absolute beginning, anyone with any wealth tried to gobble up the absolute most amount of land they could. Both as a form of wealth and a productive input. This has been less so in the past century though as agriculture has become smaller part of the economy.
  - kelipso 6mo ago
    That should be highly discouraged since land is a scarce resource. Property should be taxed exponentially with respect to how much you already own.
    - bpt3 6mo ago
      Why? Presumably you mean desirable land is scarce, which is true by definition, but land in the US is far from scarce.
      - kelipso 6mo ago
        Put a few mile ring around any city center and yes the land there is scarce. You would not want one or a small number of individuals buying up all or a lot of that land because other people want to live there too. Therefore do exponential taxation based on land they already own. Why is this confusing to you?
        bpt3 6mo ago
        For one, you're solving a non-problem in the US and creating new problems. Why do you think people are hoarding land today that could be used for housing developments and leaving it empty? What is "too much" land that would subject it to your exponential taxation?
        kelipso 6mo ago
        There are a large number of properties in big cities sitting empty due to people hoarding land/houses. Too much is anything more than your primary residence. It should be taxed exponentially with both number of secondary residences and size normalized to urban development around the property.
        bpt3 5mo ago
        Cities in vacation spots have vacant homes, but most "big cities" do not, and vacation homes are not an example of hoarding. In short, you're just making things up. I'm glad you aren't in charge, though there are a concerning number of people with your mindset.

gdulli 6mo ago

Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still include the real estate sector?

Esophagus4 6mo ago
From people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account. Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value.
- sidewndr46 6mo ago
  This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.
  - Esophagus4 6mo ago
    But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :) I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…
    - sidewndr46 6mo ago
      I'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA
      - Esophagus4 6mo ago
        Yes, just having fun :)

Ntrails 6mo ago

> people to squat in gigantic houses that they don't need In the Uk, at least, stamp duty is an obvious and infuriating driver of either buying big early or never downsizing. I did the former, parents do the latter. Easy to solve the incentive problem yet we never will

croon 5mo ago

Your entire argument rests on housing being a speculative investment. The thread is about envisioning a scenario where that isn't the case. If someone lives in a modest house and have further assets, there are many many (speculative) stores for that net worth that isn't housing.