• BlameThePeacock@lemmy.ca
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    24 hours ago

    Why do people keep saying that I can’t get that money out of the house?

    • I can use the equity as an asset to borrow money at low interest rates compared to unsecured loans.
    • I can sell the property and move to a lower cost of living location, or even just a smaller home if I wanted.
    • I can rent part of the property out at a rate commensurate with it’s current value.

    And, to top off your stupid assumptions, you say my tax payments will increase. That’s not how property tax is calculated at all. People see “Taxes per 100k” and assume that if your house price goes up, so do the taxes. Instead, municipalities set a total budget, and just divide it by the total value of all the homes in the area to come up with something called the “Mill rate.” If the municipal budget doesn’t change year to year, and all the house prices go up evenly, the mill rate simply goes down.

    • Rivalarrival@lemmy.today
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      19 hours ago

      Why do people keep saying that I can’t get that money out of the house?

      I can use the equity as an asset to borrow money at low interest rates compared to unsecured loans.

      In which case, you owe more than you borrowed. The net result of your borrowing is handing money to oligarchs. That makes them the problem, not you.

      I can sell the property and move to a lower cost of living location, or even just a smaller home if I wanted.

      Proportionally, you are not making any gains when you do that. That smaller home’s value increased at the same time your own home did.

      I can rent part of the property out at a rate commensurate with it’s current value.

      In which case, you would then be leveraging your wealth to strip others of wealth generated through labor. You would become part of the problem class with this approach.

      Your ownership of an appreciating asset is not the problem.

      • BlameThePeacock@lemmy.ca
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        18 hours ago

        You really don’t understand finances at all.

        Rich people borrow money at low rates all the time, in order to make larger returns on other investments. If I borrow 500,000 at 4%, and then invest it, I can make a lot of money. For example, If I had borrowed against my property in 2024 and invested it in the S&P 500, I would have made a 22.3% return, minus the 4%, so 18% profit on the value I pulled out of my house. There’s obviously risk involved, but this is not an uncommon practice. You can even re-invest it in real estate itself by borrowing the money to buy more properties.

        Proportion doesn’t matter at all, If I had bought a million dollar house, and sell it for 1.7 million (70% increase) and downsize to a $600k house that went up to $1020k (also 70%) in that same time, I’ve made 700-420=$280k more than if I had just bought the smaller house to begin with, minus a bit of interest difference (much less than the $280k)

        You say that renting it out is the problem, but both of the options above are also generating money by stripping wealth from other people (whoever buys the house, or whoever is buying houses that cause my house to appreciate in value)

        Housing appreciation IS the problem, without housing appreciation, housing wouldn’t have become unaffordable in the first place and we wouldn’t be complaining about the current cost of living issues.

        In order for us to have affordable housing, property cannot appreciate faster than wages. Otherwise over time, it will ALWAYS become unaffordable.

        • Maeve@kbin.earth
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          13 minutes ago

          Housing appreciation IS the problem, without housing appreciation, housing wouldn’t have become unaffordable in the first place and we wouldn’t be complaining about the current cost of living issues. In order for us to have affordable housing, property cannot appreciate faster than wages. Otherwise over time, it will ALWAYS become unaffordable.

          I don’t think you’re wrong here, but I need to let this sink in after a nap.

        • Rivalarrival@lemmy.today
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          18 hours ago

          In order for us to have affordable housing, property cannot appreciate faster than wages

          Finally, you’re approaching the actual issue. Appreciating assets are not the problem. Wage stagnation is. The working class is having too large a share of its productivity diverted to the Problem Class.

    • Rivalarrival@lemmy.today
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      20 hours ago

      People see “Taxes per 100k” and assume that if your house price goes up, so do the taxes

      Because they do. Not immediately, but they are periodically reassessed, based on prevailing market value.

      Instead, municipalities set a total budget,

      They set their total budget largely based on what they can collect in taxes.

      If the municipal budget doesn’t change year to year

      That possibility doesn’t merit consideration.

      • BlameThePeacock@lemmy.ca
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        19 hours ago

        You clearly don’t understand this, so I’ll make it even simpler for you.

        Here’s the City of Victoria tax rates for the last 7 years https://wowa.ca/taxes/victoria-property-tax

        The property tax rate for Victoria was higher in 2018 than it was in 2025

        Meanwhile, property values are up about 25-30% in that same time period.

        You can even see the rate drop significantly in 2022 when housing prices spiked during COVID, despite the City of Victoria budget not going down.

        You’re simply wrong that house value appreciation leads to higher property taxes, it’s increases in the municipal budget that leads to increases in property taxes.