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This thread is pretty mature. The more we discuss here, the more remains to be discussed. And this is as it should be. The topic is of high significance. Strongly held views have been posted here in earnest. Conflicting views have been rigorously advanced. And yet, the debate does not end here. We've considered here a fundamental issue of our time. For my part, I've endeavored to advance a sense of optimism, and of historic opportunity. To be American in America today is a truly privileged status. Going forward, I hope to see the debate elevated. We're human and have our shortcomings. Yet I see virtue in some of our failings. In the rigors of debate we become willful. And I know this is controversial, but I believe willfulness to be the expression of the god within us. It's the expression of the indomitable human spirit. In that vain, it has been a pleasure to have participated in what has transpired here. I place great significance in this ongoing discussion. I fully appreciate the historical experience of America and of America's exceptionalism. Our blessings carry with them a great duty. I believe we are thus obligated to see beyond ourselves to the higher purposes our privileged lives engender. Forgive me for my high sounding verbiage here, but it is sincere, and appropriate. I want to express my genuine appreciation to the APT project director, for starting this thread, and for contributing to it in numerous posts. Let me end by saying it's been great FReepin' here. I wish you all the best.

Ping!
Just dropped in to see if anybody was still checking this thread. Well, I've read H.R.25,and I have some answers, and some questions. You still with me here, Geez?

In relation to real estate investment, Chapter 1, Section 102

INVESTMENT PURPOSE- No tax shall be imposed... on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose. For purposes of this section, the term 'purchased for an investment purpose' means property purchased exclusively for purposes of appreciation or the production of income but not entailing more than minor personal efforts.

I would interpret this to mean that I can purchase homes for use as rental properties and not be subject to taxes. And that makes me very happy.

However, there is no such clause referring to primary residence. Except for exclusion of used property 'on which the tax imposed by section 101 has been collected' and 'was held other than for a business purpose', it sounds like a new home purchased for primary residence or a used home bought from a business (which was exempt from tax) would be subject to 23% sales tax.

Now, I remember you saying that the price of the tax would be figured in to the price of the used home by the seller, therefore eliminating the gap between new and used home prices. But imagine a home doubling in value over 12 years (fairly typical) vs. a comparable new home. The used home has only paid half the amount in taxes, and therefore has a clear advantage in negotiating sale. Conversely, a new home bought from a business entity would be subject to tax at appraised value because the original owner was tax exempt. How is a business to sell a used property with this kind of disadvantage?

Then there is the matter of avoidance. Say my partner and I build our $100k home. We have actually spent $60k building it. I can then sell the house for just enough to cover my expenses to my partner or a third party, who pays taxes on $60k, then turns around and sells it used for market value. The tax paid is $13,800. Now the expenses are $73,800. The house sells for $100k, clearing $26,200. after the second sale, the buyers have a used home that has never been lived in that paid 16% tax instead of 23%.

Why would anyone do this you might ask? Because if the builders invest $60k, then take the same $26,200 profit, sells the house for $86,200, the buyer pays 23% or $19,826, and now has the same home for $106,026. Assuming the transactions cost less than $6,026, why wouldn't they?

Help me out here Geez. I've done my homework, but I'm still seeing problems. If this plan goes into effect I need to know what to do.