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How private equity is changing housing

(www.theatlantic.com)
115 points harambae | 7 comments | 09 Dec 25 17:26 UTC | HN request time: 0.705s | source | bottom
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stock_toaster ◴[09 Dec 25 18:28 UTC] No.46208576[source]▶
Wild idea... Maybe tax wealth instead of income?

Tax break on single home ownership, but significantly increased tax on multi-home-ownership?

It would be interesting to see comparisons between PE ownership in markets with property tax vs markets without.

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gjsman-1000 ◴[09 Dec 25 18:35 UTC] No.46208673[source]▶
Wealth taxes don't work because wealth gets extremely fuzzy.

For example, unsold stock that I bought 15 years ago; and then got a loan against. I'm wealthy... kinda? But I didn't sell the stock; I have unrealized gains, and you shouldn't tax me beyond income tax on borrowed money? Okay, tax me on my unrealized gains then - but then 2008 repeats itself, stock goes down 40%, do I get a refund? Of course not, I only pay when stock goes up and never down, which is not exactly a fair incentive.

Now imagine artwork I bought 15 years ago from Banksy. Or imagine my video game collection I bought on eBay that contains some rare titles. Or what about my wine collection? Now imagine I'm Elon Musk, on paper worth $400B, but if I sold even 20% of my stock, that paper valuation would be shredded from an excess of liquidity driving the share price down, so you can't tax me on what is physically impossible to realize.

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UncleMeat ◴[09 Dec 25 19:03 UTC] No.46209096[source]▶
> Okay, tax me on my unrealized gains then - but then 2008 repeats itself, stock goes down 40%, do I get a refund? Of course not, I only pay when stock goes up and never down, which is not exactly a fair incentive.

We already do this for property taxes.

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quesera ◴[09 Dec 25 20:19 UTC] No.46210077[source]▶
That's a very strange way of looking at property taxes.
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1. UncleMeat ◴[09 Dec 25 20:46 UTC] No.46210410[source]▶
I do not see the difference between property taxes on my home and property taxes on my stock portfolio. What makes wealth taxes bad?
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2. quesera ◴[09 Dec 25 21:03 UTC] No.46210607[source]▶
A corporation does not provide services to shareholders.

A municipality is charging residents for services. Obligations are progressive (by necessity), and indexed to assessed property value (as a practicality), rather than equity or income.

Municipal operations get more expensive with inflation, and with resident demands (ballot initiatives, etc). They are never zero, and must be tied to something in the real world.

These payments are collected as a tax, because that is the only lever available to municipalities.

I see your point, but I think it's a category error.

You are taxed on realized property capital gains, beyond a certain amount ($500K?) for principal residence (anywhere you've lived two of more of the last five years). And for a non-principal residence there is no threshold.

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3. orangecat ◴[09 Dec 25 21:56 UTC] No.46211282[source]▶
Property taxes are use taxes. You're paying for the right to occupy an inherently limited resource, and for necessary services and infrastructure. It's not a wealth tax because it doesn't matter how much equity you have; it's the same whether you fully paid in cash or have an interest-only mortgage. It's also not a capital gains tax because the purchase price doesn't matter.
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4. UncleMeat ◴[09 Dec 25 22:40 UTC] No.46211731[source]▶
Me owning a bigger house than my neighbor does not mean that I use more services than them. My water bill is my municipality charging me for services. My real estate tax is a charge for the general good of my community. I see no reason why this can't simply be a tax for the national good.
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5. UncleMeat ◴[09 Dec 25 22:42 UTC] No.46211749[source]▶
The total ownership of all public companies is also a limited resource.

Whether I have 0% equity or 100% equity in my home I still own it. The only question is how much I owe to the bank. "Oh I bought that with leverage" shouldn't change things for home ownership and it should change things for a wealth tax on stock ownership.

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6. dragonwriter ◴[09 Dec 25 22:47 UTC] No.46211797{3}[source]▶
Then it’s an asset/property tax, not a wealth tax, because debt doesn't change the asset (even if it is secured by the asset), but it does change wealth.
7. quesera ◴[10 Dec 25 16:19 UTC] No.46219623{3}[source]▶
The municipality charges all residents for all services provided. Citizens vote on which services are provided to them, and which they will have to pay for.

The payment obligations are progressive by necessity, and indexed to assessed property value as a practicality.

The municipality does not care how much equity you have in your house, or how much wealth you have in other assets, or how much income you have.

Your property tax obligation is the same, whether you have unrealized gains or not. It is therefore obviously not a tax on unrealized gains.