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SVreX (Forum Supporter)
SVreX (Forum Supporter) MegaDork
12/4/20 9:39 a.m.

In reply to ProDarwin :

You're right. We are way off topic. 
 

Let me just say one more thing about your original point:

Home Ownership is not a guaranteed ticket to wealth building and should not be advertised as such.

I agree. 
 

I would suggest the following variation:

Home Ownership is not a guaranteed ticket to wealth building, its primary purpose is to own a home. There are better tools designed primarily for wealth building. In the long term, home ownership can often offer financial advantages over renting. YMMV.  
 

Additional note: that is about home ownership.  That's different than investing in real estate, or any variation of a business related to real estate (like AirBnB)

ProDarwin
ProDarwin MegaDork
12/4/20 9:40 a.m.

Agreed.  

Strizzo
Strizzo PowerDork
12/4/20 9:43 a.m.

In reply to ProDarwin :

Taxes: we paid 2020 property tax in January, and we'll pay 2021 in December so we can put both bills on our 2020 taxes on top of our interest deduction which might get us to the number. 
 

main response to your final though: nobody ever said owning or renting is absolutely guaranteed to be anything. On the average, while there are some exceptions (we can disagree how common), home ownership builds wealth compared to renting. I still haven't seen an example where renting carries so much lower monthlies that you can invest the difference and grow wealth faster for comparable properties. 

Flynlow (FS)
Flynlow (FS) HalfDork
12/4/20 9:57 a.m.
ProDarwin said:

Ok, one point at a time:

- Tax deductions-  Homeowners can deduct a large percentage of the taxes they pay on their primary residence. You can't deduct rent. And renters DO pay taxes (to their landlord, who pays the government).  (EDIT: THIS IS AN ERROR.  IT SHOULD HAVE BEEN A REFERENCE TO INTEREST PAYMENTS, NOT TAXES)

You need to have a lot of deductions to reach this point with the current tax code.  The standard deduction is $24k so you would have to have one hell of a mortgage or a lot of other deductions to meet that mark.  First time home buyers are rarely going to be able to take advantage of this.  FWIW, I have never been able to deduct enough to get over the standard deduction, even before the change.

Just a clarification, the standard deduction is $12K, not $24K.  We're not all married :P.

With $3-5K in real estate tax, a similar amount in state income tax, and $8K in mortgage interest, even with the latest tax code changes (I refuse to call them cuts), it is pretty easy to exceed the standard deduction.  Mortgage interest falls outside the SALT $10K limit.

yupididit
yupididit GRM+ Memberand PowerDork
12/4/20 9:59 a.m.

I'm 31 and been renting since I was like 20. I know I can afford a mortgage easily. 

But, I havent lived in the same state for more than 3.5 years. I really just don't feel like buying then selling whenever I have to leave. I know we have VA home loans etc to make buying easier. Even renting out my home whenever I move seems like a hassle, especially since the rent won't be much more than mortgage/ taxes/insurance in the areas I've lived in (south east VA, S.Cal, SATX). I do know some military folks who just buy a house at each assignment and rent them upon leaving. But they usually just break even or make a little money. I guess I could've been buying each time instead of renting but I don't feel like I've been wasting my money either. I do know if I wouldn't bought something in California, then I would've made a decent amount of money but I wasn't educated on California real estate back in 2014.

That said, I do plan on buying some land in this area around 2022 and building a home on it in the near future (5 years from purchase maybe). 

 

ProDarwin
ProDarwin MegaDork
12/4/20 10:08 a.m.
Flynlow (FS) said:

Just a clarification, the standard deduction is $12K, not $24K.  We're not all married :P.

With $3-5K in real estate tax, a similar amount in state income tax, and $8K in mortgage interest, even with the latest tax code changes (I refuse to call them cuts), it is pretty easy to exceed the standard deduction.  Mortgage interest falls outside the SALT $10K limit.

Oops, yeah.  I'm not married anymore either (as of this year).  But my payments still aren't anywhere near that much.  This year my interest & taxes combined were $4400.  

I wonder what % of people do hit that number.

pheller
pheller UltimaDork
12/4/20 11:44 a.m.

People thought social security sounded dystopian and socialist, but here we are, nearly a century later with it.

From wikipedia: "Opponents also decried the proposal as socialism.[8][9][10] In a Senate Finance Committee hearing, one Senator asked Secretary of Labor Frances Perkins, "Isn't this socialism?" She said that it was not, but he continued, "Isn't this a teeny-weeny bit of socialism?"[11]"

What I propose is merely a market regulation for the benefit of society. Again, we're not making more land. 

I like to use the "Rich Liberal" island analogy: if we think of our nation's land as island, would we be comfortable with one person owning all of it? Imagine if all of America's richest liberals started buying land, huge swaths of land, like, entire states and they'd sell it only to people who were poor or whom committed to identifying with their ideology. Over time what does that start to sound like - one guy who owns lots of land, who only lets people whom he likes live on it? Sound like feudalism to you?

After a while, when that one guy owns most of the land, he can start to dictate value of the rest of it. You don't like Bezos, so you hold out. Eventually, all your neighbors, all your community, is owned by him. His minions, whom he's sold land cheap too, control local government. The build walls around your property. They stop maintaining the roads in front of your house. They make life miserable for you and our family. Eventually, you break down and sell your land to Bezos, but he know nobody else wants that land, so he offers you a pittance. 

People act like this isn't possible. That no-one is that rich. What if we viewed that single person as a single TYPE of person? A group, or even an entire social class. When does that group's hold over all the land start to sound like a monopoly? Sure, they fight amongst themselves for control of the land, just as fuedal Kings did, but the lower classes? They no longer have a chance to own the land. 

This doesn't bother us because we think of the USA as a huge swath of land that nobody could own in its entirely, so people could just move away from the liberal Kings land (California) but eventually that wealth and those ideas will creep outwards. 

BTW: Jeff Bezos is worth more than quite a few countries. 

 

To be clear, I'm not pointing the blame solely at the wealthy for their gobbling up land. I don't think we need strictly socialist controls over who can own land, but I do feel that merely reigning in debt, loans, etc will not put any dent in the ability of ultra-wealthy to own huge swathes of land, sometimes in what were once affordable cities, and turning large swathes of properties into rentals. 

Real quick while I'm editing: SVREX you mention you pay (or dont pay) a homestead tax. I like those. I think we need more of them. 




 

Duke
Duke MegaDork
12/4/20 12:40 p.m.
pheller said:

People thought social security sounded dystopian and socialist, but here we are, nearly a century later with it.

From wikipedia: "Opponents also decried the proposal as socialism.[8][9][10] In a Senate Finance Committee hearing, one Senator asked Secretary of Labor Frances Perkins, "Isn't this socialism?" She said that it was not, but he continued, "Isn't this a teeny-weeny bit of socialism?"[11]"

Social Security IS socialism.  More than a teeny-weeny bit.  Simply saying it is not does not make that true.  It is a pyramid scheme designed to move money from those who pay more in SS taxes to those who pay less.  The fact that it is still here 90 years later has nothing to do with its status as socialist or not.  It just happens to benefit people who vote in large monolithic blocks, so trying to reform it or eliminate it is political suicide.

With that, I'm leaving this part of the conversation.

 

yupididit
yupididit GRM+ Memberand PowerDork
12/4/20 12:40 p.m.

In reply to pheller :

I'm not sure what a rich liberal is but what's the difference between a rich liberal and a rich non-liberal? So I can understand your post better. 

Streetwiseguy
Streetwiseguy MegaDork
12/4/20 1:30 p.m.
yupididit said:

In reply to pheller :

I'm not sure what a rich liberal is but what's the difference between a rich liberal and a rich non-liberal? So I can understand your post better. 

Thats got me confused as well, and it might be a patio-worthy topic anyway.  As an answer, I would question what the rich liberal would do with everything once he owned it all, and everyone else moved away or died...

Strizzo
Strizzo PowerDork
12/4/20 1:49 p.m.

In reply to pheller :

I don't understand, in your example is the rich liberal the government (who you suggest take this underutilized land) or Jeff Bezos? 
 

I think you need to do some research on Cuba before you advocate for such things. 

SVreX (Forum Supporter)
SVreX (Forum Supporter) MegaDork
12/4/20 2:34 p.m.

I may be wrong, but my impression of the "rich liberal" was that pheller thinks the majority of members on this board lean heavily conservative, and that he is a free thinker bringing a new concept to the unwashed conservative masses hoping to reform us to his style of more progressive thinking. 
 

Of course, none of that is true. I admire the dreams of a young man. 
 

This is not a criticism. If the internet had existed when I was his age, I would have been posting very similar, or much more radical stuff. I thought Mother Earth News was a perfectly balanced manifesto. 
 

Now I am older. I've had more life experiences, and think differently than I used to. 

pheller
pheller UltimaDork
12/4/20 3:00 p.m.

You all got focused on the wrong point I was trying to make.

 

Basically, someone wants to own all the land who's idealogy differs from yours, and in doing so, they make your life a living hell. 

Whether that person is liberal or conservative, it doesn't matter. What matters is the ability of someone to own all the land. 

pheller
pheller UltimaDork
12/4/20 3:04 p.m.
Strizzo said:

In reply to pheller :

I don't understand, in your example is the rich liberal the government (who you suggest take this underutilized land) or Jeff Bezos? 
 

God damnit! 

 

Where did I say take? I never said TAKE. I said TAX. That's it. TAX. 

If you can sit on vacant (non-primary residence) land from across the country and not do a single thing with it, whether its maintain it, rent it, AirBNB or just occasionally swing by to piss on it, you should be taxed for that luxury, and in some areas, taxed heavily. Not everywhere, certainly not out in the middle of no-where, but I'm just saying some towns could really benefit from Homestead Tax Setups and increased vacant property taxes.

pheller
pheller UltimaDork
12/4/20 3:06 p.m.
Streetwiseguy said:
yupididit said:

In reply to pheller :

I'm not sure what a rich liberal is but what's the difference between a rich liberal and a rich non-liberal? So I can understand your post better. 

Thats got me confused as well, and it might be a patio-worthy topic anyway.  As an answer, I would question what the rich liberal would do with everything once he owned it all, and everyone else moved away or died...

The "King" as we might now call him regardless of his political leanings, would rent it to everyone. 

RevRico
RevRico GRM+ Memberand UltimaDork
12/4/20 3:10 p.m.

But since they seem to want tax money for all the land, wouldn't you consider that rent already, and just skip to the point of saying the worst people on the planet, aka the government, already own all the land and just let people speculate on the value of particular parcels of it, for a kick back?

WilD
WilD Dork
12/4/20 3:13 p.m.
pheller said:

You all got focused on the wrong point I was trying to make.

 

Basically, someone wants to own all the land who's idealogy differs from yours, and in doing so, they make your life a living hell. 

Whether that person is liberal or conservative, it doesn't matter. What matters is the ability of someone to own all the land. 

shhhhhh, you are going to tip them off to my evil plan.

All joking aside, what IS your concern, exactly.  Is it simply that too few own too much?  When has land ownership truly been "fair" and universally attainable?  (never as far as I know)  Should more people own land?  I'm not sure that is a desirable goal.  In more developed (and privately owned) parts of the country, larger plots of land are continually being subdivided into smaller and smaller bits for housing.  That presents its own set of problems.

fanfoy
fanfoy SuperDork
12/4/20 3:20 p.m.
Duke
Duke MegaDork
12/4/20 3:28 p.m.

In reply to fanfoy :

No one is saying real estate is the safest investment.  Particularly not in over-leveraged, high-demand areas.

What we're saying is that home ownership is the safest way to keep a roof over your head without having to pay retail rent forever and ever until you die.

[edit]  Which is, admittedly, off the original topic.

 

Strizzo
Strizzo PowerDork
12/4/20 6:51 p.m.

In reply to pheller :

Arguably a tax is a taking, but if there is no taking like you say how does that increase housing efficiency? Would they tax someone on their vacant land if they didn't build a house on it and rent it out?  

SVreX (Forum Supporter)
SVreX (Forum Supporter) MegaDork
12/4/20 7:30 p.m.

In reply to pheller :

The only thing that is clear here is that a lot of us don't seem to understand what you want or are looking for. 
 

I own some vacant land in another state. I have been taxed on it every year for 20 years, and have paid all my taxes. I won't ever make money on it. 
 

You see that as a privilege?  I really don't understand. 
 

If the county raised my taxes to a level that would qualify as "heavily taxed" (as you call it), I would walk away and allow it to go to tax sale.  No one would buy it, and the county would end up owning it. They would lose the tax revenue they were getting from me, and gain the liability of a rather worthless piece of land.

How is that a win for the local community?

 

If it was a valuable piece of land, I would have paid more in taxes those 20 years, or if I wanted to build I would have figured out how to develop it and poured a lot of development money into that county, and improved the value and productivity of the property and the surrounding properties at MY expense- free to the county (and they get to charge more taxes in it).   That seems like a pretty good deal for the county, regardless of what I choose.

Like I said... I have no idea what the heck you are proposing. 

ProDarwin
ProDarwin MegaDork
12/4/20 8:04 p.m.
SVreX (Forum Supporter) said:

Like I said... I have no idea what the heck you are proposing. 

I am 100% in agreement here.

yupididit
yupididit GRM+ Memberand PowerDork
12/4/20 8:11 p.m.
ProDarwin said:
SVreX (Forum Supporter) said:

Like I said... I have no idea what the heck you are proposing. 

I am 100% in agreement here.

 

Still don't understand the post after he attempted to explain it. 

Duke
Duke MegaDork
12/4/20 10:21 p.m.

Basically, as I read it, he wants to use excessive taxation to force people to use their private land as he / society / the government sees fit. 
 

pheller
pheller UltimaDork
12/4/20 10:38 p.m.

Yep. 

 

But only in urban areas with very high cost of housing. Areas where it'd be easy to sell land (at reasonable prices, that is). If you're struggling to sell land in a town where my tax would be implemented, I shouldn't be implementing the tax there, because there isn't enough demand.

 

And I don't know about "excessive" taxation, but certainly more than most places implement. 

 

SVREX you keep ignoring my comment asking about your Homestead Tax Exemption and why that is any different from what I'm proposing? 

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