Interesting graphs and charts department

[glatt]

Amazing that my mortgage payment for an entire house is so much cheaper than the rent of a 2BR apartment today. When we were buying the place, I was nervous that our mortgage was going to be more than what we were paying in rent at the time, but our agent kept telling us that rents keep going up, but the mortgage payment stays the same. Turns out he was absolutely right.

It's kind of embarrassing. I pay less for housing than some of the kids right out of college coming to work here.

So here's a question. Why can't you deduct rent from your income taxes the way you can deduct mortgage interest payments? Seems like the poor get a double whammy there.

[infinite monkey]

Not just the 'poor.'

Non-homeowners make up for homeowners' deductions, like those with no dependents make up for child deductions.

When I was a DINK (double income/no kids) it seemed that we were 'dinged' a lot, then we got some breaks, but not much. Those breaks were still better than any breaks I've ever received. The most significant one of late was the 'making work pay' credit which saved me 400 bucks. That's gone now too.

[glatt]

Originally Posted by infinite monkey

Not just the 'poor.'

Yeah. That was a bad choice of words. Sloppy on my part.

But it seems like the more money a person has, the more the system is set up to favor them. I understand that in this example, the government wants to encourage home ownership, and I'm glad they do. But another way of looking at it is that they penalize renters.

[Clodfobble]

Originally Posted by glatt

So here's a question. Why can't you deduct rent from your income taxes the way you can deduct mortgage interest payments? Seems like the poor get a double whammy there.

Because every rental does still have an owner, and that owner is deducting the mortgage interest from his taxes. So at a minimum, you'd have double deductions on the same house. But what would also then happen is you'd have people renting their own houses to themselves, or renting it to their spouse filing separately or whatever, so they could take the deduction twice.

The trick is to always look at everything from a scumbag mindset. Fraud is easy if you're looking for ways to do it.

Originally Posted by glatt

I was nervous that our mortgage was going to be more than what we were paying in rent at the time, but our agent kept telling us that rents keep going up, but the mortgage payment stays the same. Turns out he was absolutely right.

It's kind of embarrassing. I pay less for housing than some of the kids right out of college coming to work here.

What about your property taxes? Surely those have gone up over the years, probably at a rate similar to the amount rent has gone up? At this point my dad's property taxes are far, far higher than the mortgage on his house, and when he's ready to retire he'll have no choice but to sell the house because the neighborhood has gotten too nice for him to keep paying the property taxes on it.

[glatt]

Originally Posted by Clodfobble

What about your property taxes? Surely those have gone up over the years, probably at a rate similar to the amount rent has gone up? At this point my dad's property taxes are far, far higher than the mortgage on his house.

Yeah, the taxes keep going up. But while there was a huge jump during the real estate boom a decade or so ago, they have stayed pretty steady over the last decade.

[pastortoy]

Originally Posted by Clodfobble

At this point my dad's property taxes are far, far higher than the mortgage on his house, and when he's ready to retire he'll have no choice but to sell the house because the neighborhood has gotten too nice for him to keep paying the property taxes on it.

How can you ever "own" a house if you have to keep up payments to the government for it? You never really have it free and clear. They call this the American dream?

[HungLikeJesus]

Good point; there's also major maintenance and renovation costs, which can be significant. I haven't really tracked it, but I bet we spend between $5,000 and $10,000 per year on things like furnace repair, new roof, etc.

[Gravdigr]

JFC.

[HungLikeJesus]

Don't you mean KFC?

[Griff]

5-10k/yr@KFC! Call the medics.

The mortgage deduction looks like a scam from where I'm sitting.

[Gravdigr]

Originally Posted by Gravdigr

JFC.

Originally Posted by HungLikeJesus

Don't you mean KFC?

Kentucky Fucking Christ? That don't make no sense.

[Clodfobble]

I have to say, while I like taking the mortgage deduction myself (I got mine, Jack!) I don't think it's really that effective at promoting homeownership like it's supposed to. I mean, who says to themselves, "Weeeeelllll, we're on the fence about buying a house, such a big commitment and all... Wait, what's that? At the end of next year, our total tax bill will be reduced by a relatively small percentage of the interest payments we will be making on this house? Oh shit, sign us up today!"

Besides that, I think promoting homeownership is a wasted initiative to begin with. They have it backwards: homeownership is associated with stable and productive families, yes, but it's an effect, not a cause. You can't just give someone a house and all of a sudden they're a paragon of civic duty and filial responsibility.

[xoxoxoBruce]

Originally Posted by Clodfobble

You can't just give someone a house and all of a sudden they're a paragon of civic duty and filial responsibility.

Yes I am.

[classicman]

WSS^^^

[Clodfobble]

I don't know about Virginia, but in Texas they're only allowed to raise your property taxes by a certain percentage each year, to help keep the established homeowners from being forced out during housing bubbles. But if you live in a place long enough, it'll still catch up with you in the end.

Our neighborhood was subject to part of the housing crash, and our house is currently still appraised at less than we paid for it (though not less than we actualy owe on it, fortunately,) but we like that because we know it'll go back up eventually, we have no intentions of moving, and in the meantime it means our property taxes are lower.