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Misleading. They are not "renouncing their inheritance". They are relinquishing ownership of certain real estate assets. Assuming the article is indeed correct.
Do Americans have any protection against the government coming in and doing this? If not, then how is real estate actually "owned" in the first place?
Do Americans have any protection against the government coming in and doing this? If not, then how is real estate actually "owned" in the first place?
Yeah in places like NJ and IL and I gather even TX, real estate taxes are sky high and can rocket up . Luckily CA has prop 13-though some folks seem to want that repealed.
Yeah in places like NJ and IL and I gather even TX, real estate taxes are sky high and can rocket up . Luckily CA has prop 13-though some folks seem to want that repealed.
Jeez that's right, and even here in California. So many neighborhoods have long time residents who can afford to live in their homes because of prop-13, mixed in among some other homes of revolving-door residents who are strapped from the expenses and hafta sell because they cannot afford to live in the homes they bought.... and no residents of in-between situations (like 5-15 yrs in residence). It's a Tale of Two Cities, in many neighborhoods including mine.
That's why you should NEVER consider R.E. an "investment". It should only be considered "shelter".
Here is a secret to successful real estate investing:
Rising population
Limited desirable land
5 critical words is all it takes anywhere in the world.
maybe 50-100 year out. all of you will be DEAD by then.
Do Americans have any protection against the government coming in and doing this?
Prop 13 was a revolt against this kind of shit.
http://www.oftwominds.com/blogdec16/assets-liabilities12-16.html
When Assets (Such as Real Estate) Become Liabilities
"It will be the middle class that accepted the notion that "real estate is the foundation of family wealth" that will be stripmined by higher taxes on immobile assets such as real estate.
Correspondent Joel M. submitted an article that struck me as a harbinger of the future: In Greece, Property Is Debt:
"At law courts throughout Greece, people are lining up to file papers renouncing their inheritance. Not necessarily because some feckless uncle left them with a pile of debt at the end of his revels; they are turning their backs on what used to be a pillar of Greece’s economy and society: real estate.
Growing personal debt, declining incomes and ever higher taxes as Greece’s depression grinds on have turned property and the dream of easy money into dread of a catastrophic burden.
After many years in which only very valuable properties were taxed, many Greeks went from paying almost no taxes on real estate to not having enough money to pay.
In 2010, property taxes accounted for 0.26 percent of gross domestic product, while this year they are around 2 percent, according to state budget figures. 'Suddenly, the state treated the Greeks as if they were rich, at the precise moment that they ceased to be rich.'
Among the many disruptions of the past few years, this one shows how traditional conceptions — and a sense of security — can be shattered. With a history full of wars, bankruptcies and rampant inflation, Greeks had always seen land as a haven.
But it is private debt — at 222 billion euros last year — that may prove an even greater danger. This shows in government revenues. With the unified tax, ownership of every kind of property is now subject to taxation.
It will be very difficult for the Greeks to get out from under this mountain of debt. Delinquent loans, which at the end of June made up 31.7 percent of all housing loans, were a mere 5.3 percent of the total in 2008."
The self-reinforcing dynamics in this narrative profoundly reverse time-honored concepts of value: assets that once held or gained value now carry high costs of ownership and lose value.
1. Governments desperate for tax revenues raise property taxes, which add costs that eventually depress sales and future price appreciation.
2. High debt levels and high property taxes trigger foreclosures and forced sales that further depress the market with high inventories of unsold/unrented homes.
3. As sales decline, appreciation can no longer be counted on to enrich owners. Instead, owners fear declines in value and higher taxes. This further depresses sales.
4. High debt levels become even more burdensome as property values fall.
5. Rather than offer a means of building and protecting wealth, real estate becomes a liability that destroys wealth via payment of taxes and declines in value.
While it can be argued that Greece is a unique situation--a cumbersome, costly bureaucracy of land transfer coupled with soaring taxes--perhaps Greece is simply early to the party...."
How likely is this to happen here in the U.S. sometimes in the future?
#housing