Friday, February 10, 2006

Old Peoples' Homes

One of the most bogus issues out there is the problem of property taxes driving old people out of their homes. Old people who own houses are one of the most affluent group and there is no reason to give them special tax breaks. The assumption is that you have a right to live in your house for the rest of your life. In fact there is a simple non-governmental solution to this if people are really bothered by this. Allow people to sell their houses to others with the sale effective after their deaths. The seller would get pretty close to full value for his house because of the rise in real estate value. The problem is that these people demanding government action deny that there should be any tradeoffs to the goal of letting people stay in their houses without paying taxes. Heinlein's solution of people setting the value which is the same for both buying and taxes would work although it would never happen. He adds the important clause that you can block a takeover by raising the value and paying 3 years back taxes.


At 10:36 PM, Blogger David said...

This is basically a "reverse mortgage" -- you sell your house, not to another person, but to a bank. You draw an annuity (annual payment until you die)


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