<story><title>Most Germans don’t buy their homes, they rent</title><url>http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/</url></story><parent_chain><item><author>cm2187</author><text>&amp;gt; &lt;i&gt;Namely, it is very difficult to raise a family of four in a mutual fund.&lt;/i&gt;&lt;p&gt;It is difficult to ski without skis. But most people don&amp;#x27;t buy skis, they rent them. Renting skis do not mean that no skis will be manufactured. There is a need for house, houses will be constructed, irrespective of whether people will over-bid on them or not.&lt;p&gt;&amp;gt; &lt;i&gt;A paid off home is a social safety net against homelessness&lt;/i&gt;&lt;p&gt;Stocks and savings are equally a safety net against loss of primary income.&lt;p&gt;&amp;gt; &lt;i&gt;Real estate can be borrowed against&lt;/i&gt;&lt;p&gt;Borrowing against your home to finance your business is no different than selling some stocks to invest into your business. In both cases you are using previous savings.&lt;p&gt;&amp;gt; &lt;i&gt;I think there&amp;#x27;s a lot of sense in NOT taxing one&amp;#x27;s first home&lt;/i&gt;&lt;p&gt;Why? Again you are assuming that the alternative to owning a home is renting one and having no savings. The cost of housing (renting) would be much lower in a country without massive over-bidding on property. There is no reason to give a tax benefit to this particular type of investment (property) over any other types of investment.</text></item><item><author>riprowan</author><text>&amp;gt; There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds).&lt;p&gt;I beg to differ.  I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain.&lt;p&gt;Namely, it is very difficult to raise a family of four in a mutual fund.  Investing in a home may is absolutely &amp;quot;productive.&amp;quot;&lt;p&gt;See, there are significant societal benefits to home ownership that you are not considering.  For example:&lt;p&gt;1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles.  Even if all of them are unemployed, all of them have a roof over their heads.&lt;p&gt;2. A paid-off home frees up cash flow.  It allows the owner to divert his earnings into other activities or investments or reduce the amount he has to earn monthly.&lt;p&gt;3. Real estate can be borrowed against.  Try that with stocks.  If you are an entrepreneur, your home is likely the asset you will use to acquire bank financing for your business.&lt;p&gt;4. With unskilled &amp;#x2F; low-skilled jobs vanishing left and right, homebuilding is one of the few markets which still relies entirely on a giant low-skilled workforce.  It&amp;#x27;s one of the few sectors that can keep a lot of people productively employed.  I think there are valid arguments against stimulating homebuilding to reduce unemployment among low-skill workers, but there is nevertheless a societal logic here.&lt;p&gt;5. In a time when wealth is centralizing as never before, investments in real estate distributes wealth locally.  I think there are valid arguments against public policy to distribute wealth, but there is a societal logic here.&lt;p&gt;6. Finally: taxing a home is very counterproductive to the well-being of the middle class and the poor.  I&amp;#x27;m sure in Germany the interest on a mortgage isn&amp;#x27;t tax deductible as you say, but I&amp;#x27;d also guess that steps are taken to refund the property taxes for the lower classes.  Otherwise you simply tax the poor out of their homes - a form of confiscation.&lt;p&gt;I think there&amp;#x27;s a lot of sense in &lt;i&gt;NOT&lt;/i&gt; taxing one&amp;#x27;s first home, at least not if it&amp;#x27;s below a certain reasonably high value.  All things considered, home ownership is empowering.  A second home or income-generating rental property is a different story, but one&amp;#x27;s domicile should be unconfiscatable by the state.</text></item><item><author>cm2187</author><text>So in Germany, the interest on a mortgage is non tax deductible. The article doesn&amp;#x27;t mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years.&lt;p&gt;I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money to start new projects, create jobs, etc). Over-borrowing to bid the maximum amount one can to buy a nineteenth century house doesn&amp;#x27;t create any job for anyone, it just transfers wealth to the hands of the seller.</text></item></parent_chain><comment><author>pixl97</author><text>&amp;gt;Stocks and savings are equally a safety net against loss of primary income.&lt;p&gt;Until you have a 2007 collapse again (predicted by some to happen again soon), where you both lose your job and a massive amount in stocks. Savings have been at extremely low rates for a long period of time in the US.</text></comment>
<story><title>Most Germans don’t buy their homes, they rent</title><url>http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/</url></story><parent_chain><item><author>cm2187</author><text>&amp;gt; &lt;i&gt;Namely, it is very difficult to raise a family of four in a mutual fund.&lt;/i&gt;&lt;p&gt;It is difficult to ski without skis. But most people don&amp;#x27;t buy skis, they rent them. Renting skis do not mean that no skis will be manufactured. There is a need for house, houses will be constructed, irrespective of whether people will over-bid on them or not.&lt;p&gt;&amp;gt; &lt;i&gt;A paid off home is a social safety net against homelessness&lt;/i&gt;&lt;p&gt;Stocks and savings are equally a safety net against loss of primary income.&lt;p&gt;&amp;gt; &lt;i&gt;Real estate can be borrowed against&lt;/i&gt;&lt;p&gt;Borrowing against your home to finance your business is no different than selling some stocks to invest into your business. In both cases you are using previous savings.&lt;p&gt;&amp;gt; &lt;i&gt;I think there&amp;#x27;s a lot of sense in NOT taxing one&amp;#x27;s first home&lt;/i&gt;&lt;p&gt;Why? Again you are assuming that the alternative to owning a home is renting one and having no savings. The cost of housing (renting) would be much lower in a country without massive over-bidding on property. There is no reason to give a tax benefit to this particular type of investment (property) over any other types of investment.</text></item><item><author>riprowan</author><text>&amp;gt; There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds).&lt;p&gt;I beg to differ.  I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain.&lt;p&gt;Namely, it is very difficult to raise a family of four in a mutual fund.  Investing in a home may is absolutely &amp;quot;productive.&amp;quot;&lt;p&gt;See, there are significant societal benefits to home ownership that you are not considering.  For example:&lt;p&gt;1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles.  Even if all of them are unemployed, all of them have a roof over their heads.&lt;p&gt;2. A paid-off home frees up cash flow.  It allows the owner to divert his earnings into other activities or investments or reduce the amount he has to earn monthly.&lt;p&gt;3. Real estate can be borrowed against.  Try that with stocks.  If you are an entrepreneur, your home is likely the asset you will use to acquire bank financing for your business.&lt;p&gt;4. With unskilled &amp;#x2F; low-skilled jobs vanishing left and right, homebuilding is one of the few markets which still relies entirely on a giant low-skilled workforce.  It&amp;#x27;s one of the few sectors that can keep a lot of people productively employed.  I think there are valid arguments against stimulating homebuilding to reduce unemployment among low-skill workers, but there is nevertheless a societal logic here.&lt;p&gt;5. In a time when wealth is centralizing as never before, investments in real estate distributes wealth locally.  I think there are valid arguments against public policy to distribute wealth, but there is a societal logic here.&lt;p&gt;6. Finally: taxing a home is very counterproductive to the well-being of the middle class and the poor.  I&amp;#x27;m sure in Germany the interest on a mortgage isn&amp;#x27;t tax deductible as you say, but I&amp;#x27;d also guess that steps are taken to refund the property taxes for the lower classes.  Otherwise you simply tax the poor out of their homes - a form of confiscation.&lt;p&gt;I think there&amp;#x27;s a lot of sense in &lt;i&gt;NOT&lt;/i&gt; taxing one&amp;#x27;s first home, at least not if it&amp;#x27;s below a certain reasonably high value.  All things considered, home ownership is empowering.  A second home or income-generating rental property is a different story, but one&amp;#x27;s domicile should be unconfiscatable by the state.</text></item><item><author>cm2187</author><text>So in Germany, the interest on a mortgage is non tax deductible. The article doesn&amp;#x27;t mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years.&lt;p&gt;I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money to start new projects, create jobs, etc). Over-borrowing to bid the maximum amount one can to buy a nineteenth century house doesn&amp;#x27;t create any job for anyone, it just transfers wealth to the hands of the seller.</text></item></parent_chain><comment><author>dasmoth</author><text>&amp;gt; &amp;gt; A paid off home is a social safety net against homelessness
&amp;gt; Stocks and savings are equally a safety net against loss of primary income.&lt;p&gt;Landlords and letting agencies can be kind-of funny beasts, they&amp;#x27;re not necessarily happy to have an unemployed guy as a tenant even if he owns a pile of shares.</text></comment>