Dispatches from District 48
Clearly a speculative bubble: (via Mark Perry)
Tax their windfall profits! Throw the speculators in jail! Oh, wait. That would be all of us Arizona homeowners. Never mind, then. This is entirely different from oil, because, um, well, it just is.
I believe there is a Capital gains tax on home sales, but it doesn't kick in till the profit exceeds $500K.
I was under the impression that there is a capital gains tax on home sales if you stay in the home below a certain number of years, which I seem to recall as 3 years, though I'm not certain on that.
Capital Gain on home sales:
$250,000 profit for single or $500,000 profit for couples.
Must be principle residence and you must have lived in it for 2 out of the last 5 years before the sale.
No limits on the number of times you can do this except for the 2 year limit.
You can only do the no-capital-gains thing once in a lifetime, that is my understanding from the little real estate that I dabbled in.
Once in a lifetime was the old law, with the "Taxpayer Relief Act of 1997" there is no limit on how many times.
For more info goto.
Gee, I wonder why we had a bubble then? Must be the evil, lecherous, predatory lenders! We need to hunt 'em down and kill 'em!
RE: Current Article
The thing that got my attention to this blog was the article that Mr. Warren wrote on 10-05-05 about " Let's Tax These Bubble -Driven Windfall Profits" about home driven income on houses!
The same thing happen in the 1980 when President Carter was in the White House. Oil prices went through the roof! Guess What!
Congress in their heat! , or wisdom , put a windfall profit tax on Oil & Natural Gas !
Did not work in the market place! Oil hit $10 +/- in 1998!
To few people in the market in the 1980's!
Today , alot more people (Market) are in play!
More votes! (Pelosi or Republicans)?
Have a nice day!
Hey...I won't sell my house for less than I paid for it...I guess I need to be charged with price gouging.
The discretionary income to average home price ratio is powerfully mean reverting... And it still has quite a way to go.
It's different because more people own homes than oil wells.
Asset price increases that we personally benefit from are far more tolerable.
Speculation I think has played a part in accelerating the price increase in oil and oil products, but let's take a whack at this with Hanlon's Razor (one of my favorite instruments.)
The beltway scare-mongers are trying to intimate that oil speculators are involved in some sort of vast conspiracy to jack prices into the stratosphere and keep them there. I think the more likely scenario is that the guys buying into all the oil futures are just the same idiots who didn't learn their lesson from the housing bubble, no need for windfall profit taxes.. they'll get theirs when this new bubble bursts.
I'm sorry, I just pooped my pants.