It’s a brilliant idea. People should not pay tax for inflation. If you buy a house today and sell 20 years later, if the home value appreciation matches inflation, you should have zero capital gains. It’s very reasonable.
Otherwise you’ll be in a hardship because you won’t be able to buy back the same house for the same price after paying capital gains tax. People should have the same purchasing power after selling.
How about we get rid of capital gains altogether? singapore doesn’t have it!
I’d also liket o get rid of short term vs long term distinction, why not!
SG is big on surveillance though. Are you sure? No gum and no talking crap about other races. Half the people here would have gone to jail in SG.
Tax on inflation is not fair. It punishes people’s purchasing power for selling, it makes people trying to hold on houses and make the new buyer’s life harder.
How is that relavant to taxes again?
Everything comes in a package. SG people trust professionals in their government to take care of business. If every random loser can come in and challenge this and that you end up with a hugely inefficient government. Inefficient government takes a lot more money to run.
Inflation is a government driven tax.
Capital gains tax only makes sense on gold standard. Cost basis has to be adjusted by inflation.
You went there and back safely.
I think it is unlikely to abolish capital gain tax, but it is possible to get the cost basis inflation adjusted in the tax reform 2.0.
And this is huge for real estate. Stock appreciation is much faster than inflation, but real estate appreciation is closer to inflation. Also RE asset distribution is much more even. So the impact is huge. Personally, if this becomes law, I’ll abolish the “never sell” rule. Instead, I’ll actively look for better asset to do 1031 exchange.
What’s your take on the chance and impact for inflation adjusted cost basis for RE?
When you sell a house and need to pay capital gain tax, you adjust your cost basis for all the years by government published CPI to avoid paying capital gain tax on inflation. For example, if you bought a house in 2007 for 750k and sold for 1M in 2018, assume the accumulated total inflation from 2007 to 2018 is 20%, your cost basis would be 900k. With 60k commissions and other costs, your capital gain would be 40k instead of 190k. This is a more reasonable calculation method.
If inflation reaches 400 times a year, you should not need to pay capital gain tax on the 400 fold increase on home price in 1 year.
If can adjust for inflation, need to change the formula for inflation 
and should be different for different neighborhoods
Inflation rate is federal government published rate. For federal tax, it would be too much to track state or city level inflation rate. All other inflation indexed tax code is based on national inflation rate.
Appreciation rate is different from inflation rate.
If your neighborhood gets more popular and you realized above average appreciation, you can pay capital gain tax on that sale and buy a house to live in a less desirable neighborhood after you pay the capital gain tax on the inflation adjusted gain.
On the other hand, if you are forced to pay capital gain tax on inflationary paper gain, you would not have money to buy another house even in an average neighborhood. That’s not fair.
It’s better to abolish capital gain tax on RE since it’s a tangible physical property. But inflation indexed cost basis is more likely to get enough votes.
This would make taxes far more complicated. We need simpler taxes not more complex.
You got my sarcasm 
Right. Keep it simple, just use the federal CPI to index cost basis.
Getting rid of capital gain tax would be simpler but nobody is talking about it. Chance might be nil.
The Bernie wacko progressives want capital gains tax of 100%. They think profits are inhumane…
“Abolish profit” is the hallmark of communism. Leftists are taking off their veil now.
Too many leftist activists posing as judges in California courthouse. We need to elect Cox to avoid our courts become occupied by commies.