re: property about to collapse (not the markets) Grant62:First...

re: property about to collapse (not the markets) Grant62:

First of all you are wrong on the CGT aspects of houses in the USA - there are numerous ways to get around the CGT "tax" on your principal residence.

Second, some houses in the USA may be more expensive than in Australia, for example in certain cities in California and New York. Once you get to multi-million dollar levels, IMO you get alot more in the US for your property dollars. There are a lot of cheap houses and land all over the States. Plus the wages in the US are much higher than Australia and the income TAXES are much, much lower.

Third, land is cheap, cheap, cheap in the States compared to Australia. If you want I can give you numerous examples. In the suburb I live in outside of Melbourne (45 minutes from the CBD), land is whacko crazy with people paying around $150,000 for 600 square meters!!! (I can buy a 1 bedroom condo in Hawaii for that price!!). Agricultural land in Australia is valued a multiple times that of land in the US.

My mother has some of the best farm land in the state in which she lives. She couldn't even get US$750 an acre for it if she wanted to sell. It is now rented out at US$40 per acre per year - the going rate for the area. Cheap junk land like that found out east of Melbourne around Warragul goes for huge prices.

100 kilometers outside of Minneapolis, Minnesota you can buy nice forested land for around US$40 - 50 an acre.

Fourth, taxes on real estate vary widely from place to place in the US. Most localities pay for the schools in their areas with real estate taxes. In Hawaii, these taxes are relatvely cheap. In my home state, my mother pays the equivalent of over A$3000 on a property valued at only A$150,000 (1/4 acre 4 bedrooms, garage, air conditioned) and are very expensive. These taxes do not include garbage, water, etc. The land usually becomes expensive when the residence is built. (In Australia rates, the equivalent of land taxes, in the US are relatively cheap!!!)

Fifth, I doubt that there are many places in the USA that add on huge transaction taxes on the purchase and sale of real estate like stamp duty in Australia. Hawaii instituted a 1% transaction tax on real estate recently - I believe paid by the SELLER. Also I have not heard of the equivalent of huge stamp duty being levied on mortgages like in Australia.