Supply and demand. As the demand for older ("untaxed") homes rise, their prices will too, until the cost advantage of old vs. new settles back to equilibrium again (people will pay extra for new homes because they believe they get extra value for them).
90% of home builders will be in bankruptcy as they wait around for thie equilibrium.
Post #96 for how new homes are not affected.
Of course the exception is the investor who buys the new home, tax free, which gives him an advantage when competing with private buyers for new homes.
Because all business and investment purchases are tax free Avis can purchase a fleet of new cars without paying the 30% FairTax. A year later when Avis sells a used car to a private party, the tax becomes due. Does the private purchaser pay the FairTax based on the new car value, or the used car value?
Seems to me that if I have to pay the 30% FairTax on an Avis used car, Avis would have to greatly reduce its selling price to make its used cars competitive with other used cars, or even new cars. If Avis has to reduce its selling price to compensate for the sales tax, then, in effect, isn't Avis being taxed?