Comment by dpark
9 hours ago
> If you live somewhere for 10 years, then move, then repeat for 40 years, you pay far more than if you never move.
This sounds like a problem with the way the particular tax is written, not with the idea of taxing housing gains at the time of sale.
> The higher the land value is, the more benefit the owner gets from the land.
What benefit does a homeowner derive from increased land value before selling?
Stamp duty doesn't tax gains. It's a tax on buyers, not sellers.
It's absolute insanity
Oh, so GP was just incorrect in calling this a tax on gains. That explains why repeat buying and selling incurs more tax.
Large sales tax on home purchases is probably a generally bad idea. Looks like Bay Area pricing would incur a 10-12% tax under the UK scheme which seems pretty crazy.
The increased land value is because the land is more desirable. If I buy some land next to a rubbish dump, it's cheap because living there is terrible. If the dump is then closed my land improves in value, and I derive value from that.
Likewise if I buy somewhere cheap in a backwater town, and the town becomes more desirable because there are better employment opportunities, better shops, better amenities, all of which serve to mean people will pay more for the land, then I benefit from that immediately.
The value is subjective, if you lived in a quaint town and now it’s become a bustling place it may be a nightmare for you , despite the price increases. That is actually a win win situation, though, since you can now move to another quaint town elsewhere while taking a pile of cash with you, with the perhaps important caveat that you do lose your proximity to places and people you may consider more important than the money.
These imaginary scenarios do not align with typical real world experiences. Very few people live near a dump that closes or see their small town unexpectedly boom (and as brabel notes, that’s not necessarily a benefit).
Most people’s home values go up because of 1) increasing housing demand and 2) the collective delusion that home prices can continue to far outpace wage growth indefinitely. Neither of these things necessarily result in an increase in amenities or improved quality of life.
My own home value has gone up something like 70% in the last 10 years. Meanwhile, the amenities near me are essentially unchanged. Same schools. Same number and quality of restaurants and grocery stores. My net worth has jumped a fair bit but my immediate benefit seems pretty much flat.