Michael Saylor Questions Housing Wealth Efficiency, Homeowners Pay Taxes Equivalent to Purchase Price Every 36 Years
Michael Saylor stated that if the annual property tax rate is 2%, homeowners pay taxes to the government equivalent to the purchase price of the home approximately every 36 years, making primary residences not an ideal store of value.
This viewpoint stems from his examples of property tax burdens in certain areas of Florida, rather than a universal calculation applicable to all regions and property types. Florida does not have a uniform statewide property tax; actual tax rates are determined by counties, cities, school districts, and special tax districts, and 2% does not apply to all properties.
The "36 years" is not simply the result of 1 ÷ 2%. If home prices and tax bases remain unchanged, it would take 50 years to accumulate payments equivalent to the original home price at a 2% tax rate; Saylor's claim of 36 years implies that property assessments or tax burdens increase over time, but he did not provide specific assumptions about price growth, exemptions, or tax rates.
Saylor also includes mortgage interest, homeowners insurance, maintenance, property management, and transaction costs in the cost of holding a home, arguing that these ongoing cash flow expenses diminish the long-term real returns of real estate.
He does not assert that housing is necessarily worse than holding cash: he explicitly states that holding cash in a bank or safe is usually worse; if purchasing property in a jurisdiction where property taxes are manageable, real estate can still generate wealth accumulation.
In market mechanisms, homebuyers pay for living services, leveraged equity, and future price exposure, while sellers include original owners, local governments, banks, insurance companies, maintenance providers, and real estate agents. Rising home prices, fixed-rate mortgages, and rental income substitutes benefit homeowners; rising interest rates, tax base reassessments, increasing insurance premiums, and maintenance costs compress net returns. Saylor's analysis views housing as an asset that requires ongoing "holding costs," rather than just considering the down payment, price appreciation, or nominal net worth.
Source: Public Information
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Saylor's asset allocation logic has long revolved around Bitcoin as scarce digital capital. Since 2020, Strategy has incorporated Bitcoin into its corporate treasury and has continuously expanded its holdings through the issuance of convertible bonds, preferred shares, and common stock; thus, he naturally measures real estate using "long-term dilution, tax burdens, and maintenance costs" and measures Bitcoin using "fixed supply, global transferability, and no maintenance costs." His criticism of real estate is not neutral residential finance research, but rather an extension of his Bitcoin capital theory.
In terms of capital flow, primary residences allocate cash flow to multiple external entities: mortgage interest flows to lenders, property taxes flow to local finances, insurance premiums flow to insurance companies, and maintenance and renovation costs flow to contractors. Returns for real estate holders come from price appreciation, rental substitutes, equity accumulation from principal repayment, and tax benefits; however, these returns must cover financing, taxes, insurance, maintenance, and liquidity discounts. The "tax burden" Saylor refers to is one of these costs and cannot replace a comprehensive assessment of local rent-to-price ratios, fixed mortgage rates, income tax deductions, and holding periods.
Historical analogies include the inflation of the 1970s in the U.S. and the high-interest rate cycle of the 1980s. In the early stages of inflation, fixed-rate mortgage owners could repay debts with depreciated currency, leading to nominal price and rent increases; however, the spike in rates during the Volcker era reduced housing affordability and imposed higher financing costs on new buyers. Current property returns also depend on local tax systems, insurance disaster risks, supply constraints, and mortgage rates, rather than being determined by a single "holding tax rate."
Essentially, this is about the transfer of pricing power. Homeowners superficially own real estate, but a portion of the ongoing cash flow is priced by local governments, lending institutions, insurance companies, and the maintenance industry; changes in tax rates, assessed values, premiums, and maintenance costs will alter the actual returns for homeowners. The value of housing lies not only in financial returns but also in residential stability, family needs, and regional choice, thus it should be viewed as a "consumption service plus leveraged asset," rather than a purely financial position fully substitutable with Bitcoin or stocks.
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