Dr. Martin Hash Podcast

Some people insist your home is not an investment, and should be treated differently, tax-wise, than other investments, that's why you can deduct your home's Property Taxes & Mortgage interest. But what is one person's incentive is another person's “loophole.” Home ownership deductions are seen as loopholes to some because owning a home is not something people in the cities do. In fact, they are actually against the concept of suburban homes, usually for environmental reasons, or because they disdain the traditional lifestyle. Also, the continuing weakness of the Middle Class means many people simply can't afford to buy a house, and can't understand why people who can are paying less taxes.

Some special treatment of home owners, like Proposition 13 in California, stop Property taxes from increasing while you own your home, and disabled veterans in some counties don't have to pay Property taxes at all. This works well for retired people but not so well for everyone else because their Property taxes will be at a much higher rate to compensate for those who don't pay. How this really works out is that essentially the younger generation, the one raising children, is transferring wealth to the usually better off older generation. Another problem is that exploitation of the special treatment fuels Real Estate speculation bubbles. Still, on-the-whole, the concept that personal home ownership should be encouraged via the Tax Code is sound, even though the backlash against it by the spiteful, envious & uninformed is predictable.