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Comment by energy123 | Hacker News Reader

A bad idea in isolation, because it forces people to store all their net worth into their main tax free house, causing people to squat in gigantic houses that they don't need or want. I've seen this distorted behavior in people I know.

We should reward the person who lives in a normal house below their means, and buys an apartment as an investment (which is private capital into new construction that wouldn't have happened if they didn't do it), then rents it out, which increases stock on the rental market, and decreases rental yields.

If you want to tax ALL housing the same, including people's only house, then sure, go for it. Or better yet, tax all land ownership. Just don't distort people's behavior by making a special exception for their main house.

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> store all their net worth into their main tax free house

If you take speculation out of the housing market, storing net worth in your main house becomes a lot less attractive.

Which was the way housing was for many years.

A house used to be viewed as a consumable good a hundred years ago, not an appreciating asset. (Before the New Deal commoditized mortgages)

At least in USA, since pretty much the absolute beginning, anyone with any wealth tried to gobble up the absolute most amount of land they could. Both as a form of wealth and a productive input. This has been less so in the past century though as agriculture has become smaller part of the economy.

That should be highly discouraged since land is a scarce resource. Property should be taxed exponentially with respect to how much you already own.

Why?

Presumably you mean desirable land is scarce, which is true by definition, but land in the US is far from scarce.

Put a few mile ring around any city center and yes the land there is scarce. You would not want one or a small number of individuals buying up all or a lot of that land because other people want to live there too. Therefore do exponential taxation based on land they already own. Why is this confusing to you?

For one, you're solving a non-problem in the US and creating new problems.

Why do you think people are hoarding land today that could be used for housing developments and leaving it empty?

What is "too much" land that would subject it to your exponential taxation?

There are a large number of properties in big cities sitting empty due to people hoarding land/houses. Too much is anything more than your primary residence. It should be taxed exponentially with both number of secondary residences and size normalized to urban development around the property.

Cities in vacation spots have vacant homes, but most "big cities" do not, and vacation homes are not an example of hoarding.

In short, you're just making things up. I'm glad you aren't in charge, though there are a concerning number of people with your mindset.

Vacation homes are an example of hoarding and should be taxed exponentially. Barcelona, for example, has already banned short term rentals starting 2029, and so has my home town, so there are at least some people in power who think like me, and I hope there will be many many more people with my mindset.

I mean, you can call it hoarding if you like, but that's not a very widely held opinion.

Spain is one of the last places on Earth I'd look to for economic policies. Enjoy your even higher unemployment and additional dying towns after attacking your only notable industry (tourism) I suppose.

There's plenty of housing available in places with no jobs, so mission accomplished in one sense!

Hoarding of housing affects normal people’s lives worse than some economic theory that’s we can see failing in real time. People’s lives are more important than theoretical economic prosperity.

By your personal definition of hoarding maybe.

Enjoy all the housing you could ever want when your town has even less economic activity than it did before!

Your entire argument rests on housing being a speculative investment. The thread is about envisioning a scenario where that isn't the case.

If someone lives in a modest house and have further assets, there are many many (speculative) stores for that net worth that isn't housing.

Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still include the real estate sector?

From people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account.

Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value.

This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value.

You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.

But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :)

I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…

I'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA

Yes, just having fun :)

For tax efficiency. The US, UK and many other countries have variations on this theme that the house you live in is taxed less than stocks, bonds or second properties.

This creates a distortion where people buy the biggest house they can afford, because everything else gets taxed.

> people to squat in gigantic houses that they don't need

In the Uk, at least, stamp duty is an obvious and infuriating driver of either buying big early or never downsizing. I did the former, parents do the latter.

Easy to solve the incentive problem yet we never will

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