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Comment by kingstnap | Hacker News Reader

As I understand it most things like stocks with be under the capital growth scheme, taxed yearly, but they left a carve out for real-estate where it only is levied at sale/realization time.

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Classic loophole. We tell ourselves this is to protect the little people who own homes, but the actual little people don’t have homes at all and rent. Meanwhile, anyone with money will get the picture invest all of it in real estate, once again enriching homeowner as well impoverishing the rest of us.

Only 29% of people in the Netherlands rent and that number is decreasing.

Yes, exactly, this policy will result in 29% of people who don’t own real subsidizing the 70% who do.

In a way I agree with you that this will cause market distortion in the form of greater demand for real estate over eg. equities. But there are plenty of such tax distortions; for example many countries have favourable tax treatment for domestic dividends.

Regardless, I assume the logic behind this exception is that while you can easily sell a portion of your holdings of publicly traded stocks to cover your annual tax burden, you can't sell a portion of a house. You could of course finance, but that's going to disproportionately benefit lenders.

It's true that it's a carve out, and current young generations are having huge problems getting homes in a lot of the world.

But in the Netherlands, the overall home ownership rate is still about 70 percent (https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__c... might need to drill down a little).

In the US it's 65 percent.

Carve outs for home owners are some of the most understandable political strategies across the developed world.

I totally get that it’s an understandable political strategy. I just think it’s in defensible as anything but a political strategy, and that it will ultimately make life worse for more people versus simply treating assets as assets, including homes. If homeowners do not wish their homes to be treated as assets, then they could simply forgo the right to profits, but I suspect they will not do that.

While I don’t disagree, I think it’s worth noting that the Netherlands has a pretty good level of social housing. Not perfect, but I think it’s 26% based on the stats link in the parent. Also rent controls. Although these also tend to reward people who have been in the system longer (which _might_ be by design, but that’s just like my opinion)

Social housing and rent controls are not a substitute for basic tax fairness. Of course, as a political tactic, it’s a great way to distract from tilting the entire tax system toward those who already have the most rather than trying to at least try to achieve some sort of a level playing field.

Home ownership is and would continue be taxed in box 1, so that’s not even superficially the reason for carving out real estate.

Box 3 on real estate only come in play for home 2+, and rental properties.

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