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Houses are for living, not for speculation

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Re: Houses are for living, not for speculation

#41

Post by energy123 »

gdulli wrote: post #27
energy123 wrote: post #11

Earlier quoted context omitted.

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 hap…

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?

For tax efficiency. The US, UK and many other countries have variations on this theme that the house you live in is taxed less than stocks, bonds or second properties.

This creates a distortion where people buy the biggest house they can afford, because everything else gets taxed.

Re: Houses are for living, not for speculation

#42

Post by Markoff »

xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

no problem, main apartment will be written in my name, 2nd in my wife's name, 3rd in my son's name, 4th in my daughter's name and for others I will just set up companies

this proposition literally solves nothing

and for the record I own one real estate, which I bought without mortgage and live there with my family

Re: Houses are for living, not for speculation

#43

Post by PLenz »

xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

This is an indirect way to get at what we really need: a wealth tax. Don't treat the symptom, treat the disease.

Re: Houses are for living, not for speculation

#45

Post by cestith »

rogerrogerr wrote: post #34
lucky_cloud wrote: post #13

Earlier quoted context omitted.

You say that as if those things have always required money. People had all of those things for hundreds of thousands of years before money was invented.

“Money” is just a way to say “people’s time and resources.”

In the US economy and much of the rest of the world, money is decreasingly tied to the time or resources of people. It is increasingly tied to the money, market capture, and regulatory capture of corporations that specialize in finance rather than producing goods.

Re: Houses are for living, not for speculation

#46

Post by sidewndr46 »

Esophagus4 wrote: post #40
gdulli wrote: post #27

Earlier quoted context omitted.

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?

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.

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.

Re: Houses are for living, not for speculation

#47

Post by horsawlarway »

Taronar wrote: post #29
Ekaros wrote: post #25

Earlier quoted context omitted.

I am against "speculation" on any sort of real estate. On other hand I am not against real estate investments. And I don't think single family housing deserves any kind of special treatment. I see no reason why someone providing capital to build a building and then renting it out to cover cost of that capital, maintenance and building cost is unreasonable or bad thing. Issue really is when market is manipulated to ke…

Lets say a transaction has 2 parties that want to extract value (builder, buyer) if there are 3 parties now everyone needs to make money. (builder, speculator, buyer) middle mans ALWAYS increase prices and add little to no value to the actual GDP of a country. They do offer financing, but a financing value of lets say 500k vs a construction value of 500k the construction value has more weight because it is fully fina…

I'm going to suggest that the "buy" case actually has far more interested parties trying to extract money.

In no particular order:

- Financing company

- Realtor x 2 (both seller and buyer)

- loan servicing company (may or may not be the financing company)

- Insurance companies (multiple, depending on how financing is achieved, everything from property itself, to title, to PMI)

- Appraisers

- Home inspectors

- Closing attorneys

- County tax office

- City tax office

Basically... there's a reason that renting is the right call if you're not buying to hold for at least 5 years, ideally 10.

---

There absolutely is speculation in housing markets, but at least in the markets I'm familiar with - it's not really the landlords who are renting houses that are doing the speculation. It's the folks who buy up 100+ houses in depressed/low-income neighborhoods during recessions and then sit on empty property for years.

Re: Houses are for living, not for speculation

#48

Post by naasking »

xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

Speculation is not really the issue, most of the issues are around regulations limiting construction.

If you wanted to incentivize home buying for young families, then the demographic that needs the most incentives are old people whose kids moved out decades ago. Every single person I know has two aging parents living in 4 or 5 bedroom homes by themselves, my own included. I know people are sentimental about the homes they grew up in, but this is the biggest lever you could move: hike property taxes on properties with unused occupancy.

If you want to keep the home in the family, then this encourages the parents to give the home to one of their kids who actually need it because they're starting a family of their own.

Re: Houses are for living, not for speculation

#50

Post by CodingJeebus »

Ekaros wrote: post #25
xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

I am against "speculation" on any sort of real estate. On other hand I am not against real estate investments. And I don't think single family housing deserves any kind of special treatment. I see no reason why someone providing capital to build a building and then renting it out to cover cost of that capital, maintenance and building cost is unreasonable or bad thing. Issue really is when market is manipulated to ke…

> I see no reason why someone providing capital to build a building and then renting it out to cover cost of that capital, maintenance and building cost is unreasonable or bad thing.

The problem is the scale of investment. For example, 3 companies own 19,000 houses, or 11% of the rental market, in the Atlanta, GA area[0]. The market is being "manipulated" in that investors with vast amounts of cash are outbidding folks trying to buy a primary residence, and by owning tens of thousands of homes, you exert a measure of control over the housing supply (i.e. "manipulation").

I don't believe that companies should have the ability to own so many houses, and the easiest way to curb this is to progressively tax investment property to the point that isn't financially feasible to own tens, let alone thousands, of homes.

0: https://news.gsu.edu/2024/02/26/researchers-find-three-compa...

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