Is House An Asset Or Liability?

My father is a lawyer and I have often seen him discussing several matters with my mother but I honestly never tried to know legal things since I was not much interested. However once my brother asked my father why is not a house an asset? I stood up and said of course it is an asset but he said no it is a liability. I too at that point of time grew curious to know is house an asset or liability, and my father started defining the meaning of the terms. He left it upon us to decide whether a house is a liability or not so we both started researching about it that day. Here is all the details I got to know

Asset refers to a valuable thing or evern person but in terms of real estate, it refers to a property where one has planned long term use. 

Liability is the state of being legally responsible for a thing. Real estate liability is a legal liability that is connected with the use, sale and trade of real estate.

Is a house an asset or liability?

Now I think a house is an asset as we all invest in homes and it can be said to be a tangible asset. However it is also true that a house is an expense and not an asset. It is not liquid and many people tend to sell the house before their plan as well.

Therefore a house is an asset as per financial statement but if it is a mortgage, it becomes a liability. Just ask yourself a simple question and you will get the answer yourself. When people are asked about the net worth of their asset, don’t you think they do include the house price as well? I hope this answers whether a house is an asset or liability.

My father too admitted that a house is an asset since it is of great value to us. It is a great question to pose and the more I searched, the more perspectives I got. 

This is all I could say as my answer to is house an asset or liability.

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