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by xnx9 hours ago |
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upvoteby iso16319 hours ago|
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"Oh no, someone's given me an extra $500k for doing nothing which I'll get when I (or my kids) sell my house, how terrible"
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upvoteby jonhohle8 hours ago|
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But they didn’t do nothing. They put up capital for a resource. Generally more capital than anything else until late in career.
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upvoteby dghlsakjg6 hours ago|
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And arguably, they already extracted the value of that house by having a place to live without having paid for it up front. They didn’t even put up the capital in most cases. In the US they will have been granted a loan that is backstopped, and therefore subsidized by the government. Don’t forget the mortgage interest deduction, that’s a massive homeowner subsidy.

So someone else put up the capital, the government made that capital cheap, and societal demand with artificial scarcity (in most places) pushed up the asset value.

I’m not saying it’s a bad thing, but let’s not pretend that making capital gains on a house in the US is anything like any other available investment.

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upvoteby mancerayder3 hours ago|
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They maintained the home and paid taxes on it. Have you ever had a failed septic system? A major water leak? A new roof? There's this whole anger around home ownership you get these days, oftentimes by people who have no experience in the matter.

Yes, mortgages are subsidized by our interest tax deduction system. That part is true. It doesn't turn home ownership into something with no risk, and it certainly doesn't turn it into this subsidized investment. It's a liability, not an investment.

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upvoteby carlosjobim1 hours ago|
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Many inherited the real estate. Or bought it for a fattened steer.
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upvoteby iso16316 hours ago|
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They did not create the resource (the land), nor did the person they bought it from.
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upvoteby collinmcnulty9 hours ago|
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Exactly. Surely the finance industry can come up with a product that automates this so you automatically sell them a tiny slice of your home to make up the property taxes without it affecting your cash flows.
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upvoteby dghlsakjg7 hours ago|
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The private finance industry need not be involved.

Just have government allow taxes to be deferred until time of sale with interest pinned to the cost of borrowing for government. That already exists where I live for people over the age of 65. The government can still get the revenue for free via borrowing and the payback is more or less guaranteed.

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upvoteby anon848736284 hours ago|
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This really seems like the most fair situation, if we don't want to a) let retired people stop contributing their fair share, b) kick old people out of their lifetime homes during their most vulnerable years.
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upvoteby adrianmonk4 hours ago|
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I believe you can get a reverse mortgage line of credit that allows you to take out money as needed. That is, a reverse mortgage doesn't have to be a predetermined lump sum or monthly payout.

This doesn't totally automate it, but it takes away the need to manage the proceeds from a reverse mortgage between the time you receive a payout and the time you pay your taxes.

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