If we wanted to do this, it would be trivial to introduce a 100% capital gains tax on the sale of real estate.
Instead, we give people an exemption for their real estate capital gains, so they can buy a bigger house without paying taxes at all. Then these same folks pull up the latter by voting in restrictive zoning to protect their property values.
There is one verifiably rigged game in finance, and it's residential real estate in affluent areas. It's the only industry where overt collusion and cartel-like behavior is completely legal. The result is generations of people who rationally load themselves up with way more debt than they probably should, because getting on the latter is the only way to stay above water within our lifetime.
I actually think an land value tax is our best option, it's just that a land value tax still allows for housing as investment. To make housing not an investment you need to eliminate returns from housing altogether.
Yes, obviously I think that having a 100% capital gains tax on housing would be pretty absurd, and would not lead to the types of outcomes we actually want. We often do want developers betting housing, which incentivizes improvements and reselling the places. But my point here is that -- for those who truly want housing to not be for speculation -- you need to completely eliminate economic gains from buying housing. They way you do that is to tax the capital gains that come from the sale of housing to the point where they no longer exist.
A land value tax is probably the best option for what we want to happen which isn't "eliminating speculation" but is instead to prevent land hoarding. We actually want people to speculate on properties, but in doing so, to develop them in to efficient uses if that future value.
Instead, we give people an exemption for their real estate capital gains, so they can buy a bigger house without paying taxes at all. Then these same folks pull up the latter by voting in restrictive zoning to protect their property values.
There is one verifiably rigged game in finance, and it's residential real estate in affluent areas. It's the only industry where overt collusion and cartel-like behavior is completely legal. The result is generations of people who rationally load themselves up with way more debt than they probably should, because getting on the latter is the only way to stay above water within our lifetime.