Is it not that the gains are unrealized? If they sold the house they would pay capital gains tax?
replyI'm not a finance person but I think capital gains kicks in if you sell early. Otherwise, just regular taxes?
replyopposite, income taxes take place first. after a waiting period, its just capital gains. capital gains taxes are typically lower than income taxes so this encourage long term holding
replyProperty taxes are unrelated to income tax
replyI think not wanting to pay some yearly tax on that $1.4 million because the government pretends that the same as having $1.4M cash in the bank, or making $1.4M in a year, is fine.
replyNot wanting to pay the property taxes associated with a $1.5M home is the problem.
Which is why we also have things like a deferred property tax program! The way to "solve" the problems Prop 13 addresses would be to expand programs like that, but homeowners—disproportionately active middle- and upper-middle-class voters—want to have their cake and eat it too.
replywhat reasonable persons wants to pay taxes? Just because you like to pay extra doesn't me we should.
replyI mean, I do too. Mine just happens to have been bought before the last inflationary cycle.
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