I don’t know how much it varies by jurisdiction, but in the USA there’s some weirdness in handling of cost basis and capital gains for inheritance of real estate that doesn’t apply to more liquid assets. Effectively, heirs can pay less taxes on the gains from real estate if they inherit rather than buying an appreciated asset.
I think one aspect is that financial assets are merely stores of wealth with potential for growth/returns as well as risks. The house has both of those as well as a direct use value in consuming the housing services. Additionally it offers something of a risk/uncertainty mitigating role. Once paid for the cost of consuming that housing services is pretty low so even if you see a bit hit to your income you still have a stable place to build from.
I think it’s really all the non-pecuniary aspects that get missed when analysis starts relying too strongly on the monetary equivalence point of view; by which I mean we start filtering those aspects out and just don’t see them.
Not sure why home vs financial assets would be better or worse for inheritance. Ultra long term I’d expect old houses to become a bit of a money sink.
I don’t know how much it varies by jurisdiction, but in the USA there’s some weirdness in handling of cost basis and capital gains for inheritance of real estate that doesn’t apply to more liquid assets. Effectively, heirs can pay less taxes on the gains from real estate if they inherit rather than buying an appreciated asset.
I think one aspect is that financial assets are merely stores of wealth with potential for growth/returns as well as risks. The house has both of those as well as a direct use value in consuming the housing services. Additionally it offers something of a risk/uncertainty mitigating role. Once paid for the cost of consuming that housing services is pretty low so even if you see a bit hit to your income you still have a stable place to build from.
I think it’s really all the non-pecuniary aspects that get missed when analysis starts relying too strongly on the monetary equivalence point of view; by which I mean we start filtering those aspects out and just don’t see them.