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Shabbat Parashat Matot-Massei| 5767
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Question: If one buys a home for $100,000 and sells it 25 years later for $250,000, should he pay ma’aser kesafim on the net gain of $150,000 or can he subtract from the net gain for inflation, mortgage payments, improvements, or other matters?
Answer: Few classical sources discuss this common matter these days. This can be explained by changes in economics. Our point of departure is that the sale of a home obligates one in ma’aser on the net gain, as Igrot Moshe, Yoreh Deah II, 114 assumes. However, some of the technicalities in arriving at the real net gain make it almost impossible to arrive at an exact figure.
Rav M. Feinstein (ibid.) deals with halacha’s outlook on inflation’s erosion of a currency’s value. There are complicated reasons that despite inflation, one who borrows $1,000 returns $1,000, and if he gives more, he violates the prohibition of ribbit. Regarding ma’aser kesafim, though, he said to adjust the price for inflation to determine the real gain. However, he felt that the government’s publicized Consumer Price Index (or madad) is not correct for our context; rather, we should consider only basic, not luxury items. In practice, the CPI may still be the most realistic tool people have access to.
Regarding a mortgage, it does indeed raise the expense of buying the home. However, a major component of that cost is due to the inflation component of the mortgage. Thus, if one took off for 25 years of inflation, he cannot also take off the full added payments of the mortgage. Presenting a mathematical system to deal with this is not practical in this forum.
Certain taxes, home improvements and upkeep that are needed to maintain or raise the house’s resale value may also be deducted. However, much work done in a home over 25 years is more related to quality of life during those years than to the home’s resale and may not be deducted.
One could claim that the practice of ma’aser is not geared for the purchase and eventual sale of residential real estate, assuming the funds used to buy it were “after ma’aser.” When Chazal extended (by their understanding of p’sukim or rabbinic decree or advice)the concept of ma’aser from agricultural produce to include other earnings, they addressed primarily business dealings (see Tosafot, Ta’anit 9a). When one buys $1,000 of merchandise to sell it shortly for $1,500 that is commercial activity to create earnings and is obligated in ma’aser. When one uses earnings from which ma’aser was taken to buy a home to live in that is a matter of consumption not commerce, and he need not give further ma’aser if its price goes up. The question is whether selling it creates a new obligation. One could distinguish between one who bought real estate in order to sell at a profit and one who sells because he needs to change his home for some reason. The case to exempt is strongest when one needs all the proceeds to buy a new home. If two people swap homes, intuition dictates that neither would have to pay for the previous appreciation. It is not clear that is different from a case when one receives money but does so to enable him to pay for a new home.
The prevalent position (see, for example, She’eilat Ya’avetz I, 6) is that calculating ma’aser kesafim is only a proper minhag, not an outright obligation.This justifies being lenient regarding calculations and machlokot, especially if that was one’s stated intention when starting the practice. However, ma’aser kesafim is not a simple custom. Rather, it is the recommended, average level of fulfilling the mitzva of tzedakah (see Shulchan Aruch, YD 249:1). One should always want to give tzedakah generously. Cash flow issues often make it difficult, and the sale of a home may give one the opportunity to do so. It may also be a time that one realizes that his home purchase decades before was Divinely blessed and a good time to give significant contributions to those in need. Thus, the question of whether there is a formal obligation of ma’aser, which is anyway hard to calculate, is almost moot.
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This edition of Hemdat Yamim is dedicated to the memory of
R' Meir ben Yechezkel Shraga Brachfeld o.b.m.
Hemdat Yamim is also dedicated by Les & Ethel Sutker of Chicago, Illinois in loving memory of
Max and Mary Sutker
and Louis and Lillian Klein, z"l.
May their memory be a blessing!