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115 points harambae | 2 comments | | HN request time: 0s | source
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hardtke ◴[] No.46208389[source]
One of the issues the article doesn't mention is that these houses are effectively cheaper to purchase for corporate owners. Generally they can borrow money at a lower rate, but the ability of corporate owners to use depreciation on a new purchase to offset profits from previous purchases is more significant. Effectively they are redirecting money that would be paid in taxes into the payments on the new purchase.
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HexPhantom ◴[] No.46209057[source]
It's wild when you think about it: a family scrapes together a down payment and pays full freight on property taxes, while a corporate landlord can roll one property's paper losses into the next deal and keep building their portfolio, tax-deferred
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bpt3 ◴[] No.46209524[source]
In many states, there's a homestead exemption on property taxes that doesn't apply to non-owner occupied properties, so the opposite is true.

Also, I don't know what you mean about rolling paper losses into the next deal, but I suspect it's not accurate either.

There's a reason this non-existent loophole wasn't mentioned in the article that was looking for reasons to hate on corporate landlords.

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1. georgeburdell ◴[] No.46209624[source]
Capital loss carryover is possibly what they were referring to

Unrelated note but the Homestead exemption in Santa Clara County, average sale price $2,300,000, is $7,000. To be explicit, the home’s value is reduced by $7,000 for valuation purposes.

Edit: the tax deferred part sounds like a 1031 exchange

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2. bpt3 ◴[] No.46211872[source]
You might be right about the 1031 exchange, but that has almost nothing to do with property taxes.

The homestead exemptions are very small or non-existent in some states, but I believe they are fairly substantial in the south. Ultimately, my point was that they are completely wrong in that I don't know of a single locality where landlords are given discounts on property taxes but owner occupied homes have to pay full freight, but the opposite is true in at least some cases. They could be talking about developer incentives for new construction, but that's not the same thing IMO and it's difficult to understand what they meant.

It's very, very hard to talk to people who have such strong, completely uninformed opinions and seem to be completely unwilling to even attempt to educate themselves on the topic. To be clear, this is not pointed at you, I'm just not willing to invest the time you did to seriously guess at what the parent poster was going on about.