this post was submitted on 01 Apr 2024
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We really need to make investing in property less lucrative than other means.
I mean we could start taxing capital gains as income, except no we can't because that would never happen.
Capital gains shows up when you sell. Rental income is taxed as income. Anyone who sells a home, primary residence included, will pay capital gains on any increase in value (deprecation aside) depending on how long they’ve owned the property.
If you just go after capital gains as income, you’re also going after people’s savings and retirement accounts. Not good.
So yeah, people pay taxes on income from and selling a rental.
You’re not going to get what you want by going this direction, and it’s not a good idea.
You need to prevent corporate ownership of and squatting on residential properties. These giant corps create artificial scarcity and fix rent prices, and because they’re corporations, can avoid much of the taxation you and I see. That’s the real issue. Not some guy who owns a couple houses and rents one out.
I would be interested to see data on how much capital gains tax is paid by people in whichever (income) tax bracket, or how people's proportion of income tax vs capital gains tax lines up.
Savings interest and such is already taxed as income, no?
Hitting retirement accounts would make investing enough to retire harder, but tax brackets could be set so as to limit this effect (which, again, wouldn't happen) while still capturing an awful lot of real estate sale income. Almost any house in my city has gone up by enough to immediately put you in upper-middle-class range for your income by itself if you bought it even just a handful of years ago, so selling/trading/working in addition to that would tax the sale significantly.
I get that there would be a burden to "common folk" but I would really love to see how much, compared to closing the easy out for richer folk.