Should we really buy our home?
by Philippe Garraud
source: Le Monde
For decades, governments have encouraged home ownership. Government see this as a stabilizing factor. The ordinary tenant is in effect deemed unstable, irresponsible, and voting left. The homeowner is, on the other hand, a supporter of order and voting right. Although not completely false, this vision is excessive.
The general perception also encourages home ownership. Most people say it's a waste of money to give it to the owner (old, bitter grandpas’ from ancient times). On the contrary, to enrich the banks do not seem to bother anybody. Everyone is welcome as well to see their property "get value". Really? Your apartment, has it expanded? capital gains are theoretical, to feel it must be sold. OK, but where to live then? In most cases people sell to buy, so the gain is useless.
Indeed, in a sale-purchase transaction, you must pay legal fees, makes it a 10% tax (if I understand) of the value, which goes up like smoke. Everyone can make his accounts, but that's about a year of income, everyone is permitted to hesitate before making such a transaction.
Besides these facts, some job-search sites promote job mobility. Mobility due to a job opportunity is often necessary to accept. However a change in city brings many problems: spouse employment, school of children, the move itself, etc. Why add the cost related to the sale of the previous residence to the whole struggle? For a tenant it will be much simpler: Goodbye Mr. Owner, I'm leaving in three months.
The removal of legal fees would make the sale-purchase less expensive, and thus removing an obstacle to mobility. To balance the national accounts, this tax could be replaced by a tax on financial transactions. 10% tax financial transactions… it would change many attitudes.
To encourage low-income people to borrow heavily to buy a home is unsafe, we saw the United States. In the current race the smallest purchases are heavily penalized: the price of a home is the price that only well-off buyers can afford. This is unfortunate, but it is dangerous to ignore the fact. The struggle is unequal. It will lead to long, heavy debt loads –a lifetime of deprivation. In the event of dismissal there comes the drama: people sell, and even worse, often in such a bad situation, modest homes will suffer from sales.
I am not sure of being right. Let each one do the accounts.