using retirement funds to buy a house

phecksel wrote the italicized parts; my thoughts are in bold :

Currently renting a house, which I can buy for below current market value.  Just because it is a "good deal" does not mean it is the best deal.  House is extremely well built, (a positive, to be sure) but a bit larger than is required  (A serious negative in many ways: you have to heat and or cool the whole thing in a post peak oil world. This is an unnecessary expense - unless you expect to have grown kids living with you, which may be all the retirement plan many of us have if SS goes bellyup)  as the kids are floating in and out with college. See the "College as gateway to debt slavery" thread, please. Lot is small, How small? We have 1.5 acres with an 1100-sf house, and can barely make enough food to suplement our deep larder with fresh produce. If the SHTF, we can plant the whole fenced yard but with anything smaller we'd have very little coming out of our garden.  but due to neighborhood arrangement, gets a lot of rain run-off where the garden is located. Water is good; runnoff maybe not so good. Runnoff from where? Might it be contaminated? Runnoff from streets has lead and other chemicals.

Positives

• cuts property taxes down (rental properties have higher tax rates) Where are you located? I live in SC, and taxes on the house are $500 a year - in NY they were $500 a month. Higher and lower taxes for your region may not compare to taxes for other regions.
• Lowers insurance costs (property insurance for rental is higher than owned, + the cost of renters insurance) Higher and lower insurance for your region may not compare to insurance rates for other regions, as well.
• Eliminates the monthy payment (minus of course property taxes and insurance) There will be no costly move, too.
• We would own it free and clear So you will be able to buy it outright, and not hold a mortgage?  But this is not the only place you can buy, just one you are familiar with.
• making use of the money rather than watching it fritter away I agree that owning a home free and clear is the way to go in uncertain times. Make sure to have enough PMs to pay severeral years worth of property taxes, though, and allow for inflation to raise those taxes.

Negatives

• have no mobility, stuck in one location Yes. Is there a reason you used the word "stuck?" Because that is a telling word choice. 
• paying taxes and penalties to the IRS How much? I took a 37% hit on early IRA withdrawals to get our house as sustainable as possible and do not regret it.
• located in a suburb close to other people DO YOU KNOW THEM? Are you plugged into your community? This is, perhaps, the most important question of all. Most suburbanites do not know their neighbors. That sort of ingnorance will be dangerous, when coupled with  high population density. Here is a site to look at how your community stacks up.  I moved from an area with a population density of 3680 people per square mile (surounded by urban areas) to an area with a population density of 1179 people per square mile (surrounded by farms) and that many folks per square mile still makes a lot of my prepper friends nervous.  My suburban "homestead" works for me, but might not work for everyone.
  
• limited land to farm Right. See above. 
• using retirement money today All of it? If this is SOME of it, that would make more sense (and is what my husband and I did). On the other hand, if the US dollar falls apart, is that money really "saved" for later?

_________ Hope this helps!

Safewrite

We bought our junk silver through a large online dealer, with receipts and everything, except for a couple of old silver dollars. If I had to get reciepts or dates for those two, I think I might have a problem - so yes, for those couple of silver dollars it might be difficult, but the rest are all public record and accounted for. Thank goodness it is not much, as I expect hyperinflation to cause huge gains that we will owe taxes on.  We are not heavily invested in PMs (no gold at all) and most of our "investments" are things like a well, inslulation, and other physical preps paid for with part of my IRA that I took early withdrawl on. Believe me, the IRS got their cut (and it was huge).

But I stand by what I said - the poster considering buying a home should consider setting aside enough PMs to pay property taxes. And that amount varies by location - widely. At least here they are not very large - in NY it was more like we rented our land from the state.

Dear lacourre,

Welcome to the forums and CM! Sadly, yes, PM holders will be responsible for  taxes on the "phantom gains" to the value of precious metals (PMs) as they go up in value. It's one of the main reasons I am not heavily invested in PMs. (That, and the fact that my husband and I think we will get more bang for your buck with food, water and energy resiliency.) But I still think it's a good idea to set aside enough silver to pay any property taxes.

Not to hijack the topic, but let's say phecksel (this is his thread, after all) buys this house he is renting, or another one. He sets it up as what I call a Suburban Homestead (if you use this term please credit me, as I am writing a book on it): with sustainable water, energy, food, and a home business that could work via barter if there is a collapse. If property taxes are not paid, the taxing agency can seize the home. This is not a good thing.

To me, setting aside enough money to pay the tax man is just common sense.