They are generally called non-primary residency taxes, and they're definitely a thing, and definitely getting more publicity, and most definitely need to become much stronger and more widespread.
We have these in BC - they were adopted in response to overseas real estate investment (and other factors) driving the Vancouver housing market insane. Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund. So the fight to keep housing affordable for everyone is a difficult one.
One of the issues is that when these sorts of policies initially roll out you tend to see a contradictory effect of sudden spiking in prices as a lot of people who were on the fence suddenly decide to add to the housing market demand - but over time these policies tend to settle in a place where thing are more affordable.
The other issue is that the renewal period for first time home owner benefits is quite long, so if you are exiting a long term relationship or trying to pick yourself up after bankruptcy you can be forced to enter the market as if you were a well established asset holder.
Non primary is one thing - but perhaps the thing that needs to be gone after is commercial residential (as in, if you have more than x properties). Or commercial ownership of single family homes. There is a difference between owning a 10 unit apartment and owning 10 single family homes.
Many places have a (small) rebate for owner-occupied real estate. Cambridge, MA is one; I get a break for living in my house as a primary residence.
Edit to add: I looked up the exemption calculation. It excludes up to $432,666 from the assessed value. Multiply that exclusion by the rate of 0.00585 ($5.85 per $1K per year) and the exclusion reduces a homeowner's taxes by $2,531.10/yr.
We have that in Michigan. Non-homestead property taxes. All it does is make apartments more expensive for renters. The cost is just passed on to the renter.
This, this will be actual result. "Just add more taxes" === the renters pay that delta.
Scale it per property === take the average of taxes / homes, pass it along to the renter.
About the only way I can the cost not getting passed to the renter is for a "the government" to set the rental prices as if the home was under a rolling 30-year mortgage, taking into account PITI. Adding a property tax on top of that ONLY to the property owner, maybe exponentially per property owned, could curb companies like Blackrock.
That being said, I have very faith that a "the government" could do this efficiently/correctly/at all. Trying to trace down umbrella corps and whatnot would be cat and mouse. The US government can't even figure out who is cheating on their taxes as it stands.
> I don't think I've ever heard of a politician even talking about that though
You have to consider that legislative members tend to own property and tend to be baby boomers. They are far removed form the experiences that younger generations have to deal with - from their perspective, their home value can go up 20% in 2 years and that will be rationalized as a normal market. They are not talking about it because they are benefiting financially, and talking about may make them hurt financially. This will change, baby boomers cannot live forever even though they behave as though no future generations exist.
It won't change. After the boomers come the millennials, and I believe there's still a generation in between (generation Y?).
Many of them may have been just in time to snatch a house from the market, and they see their home value go up. None of them are going to advocate for super high taxes on their "unjust" gains nor will they give a discount to future buyers. They will maximize the return just like everybody else would.
It's not boomer behavior, it's human behavior. Boomers were just lucky to get in earlier. The only annoying thing about some boomers is that they don't acknowledge their luck, and insist it was all due to their hard work or brilliance.
The school going generation always wants a revolution, a redesign of society. To fix its flaws, to make it more fair. It's easy to want to change everything if you have no responsibility or anything to lose. But then they grow up and have skin in the game, and they'll be just like everybody else, protecting whatever wealth they have.
Consider that many boomers were hippies when they were young, rejecting even the notion of personal property. Now they own almost all property. The 21st century version of hippies are even better at managing progressive optics whilst taking in top 1% salaries.
Most baby boomers (the ones getting all the blame) usually own one house, that they live in... even if the value goes up, they need a place to live in, and the high prices are pretty much everywhere, people actually want to live. The only ones profiting from baby boomers are their kids when they inherit the houses.
Politicians are probably getting paid of by companies investing in housing and buying up hundreds or thousands of houses, because the price increases make it more profitable than many other investments, and (unless there's some legislative action) makes the investment safer than most other high-profit ones (eg. cryptocurrencies).
Whenever people say anything complex can be fixed easily with legislation, I'm pretty sure they don't have a clue.
These types of issues are never easy to fix, because they're cause by many factors that have taken years to form. There are no easy legislative fixes in practice. They only exist in theory.
another thing you can do is raise the interest rate on the mortgage for investment properties. This is already done somewhat but they could increase it quite a bit. Can't really pass the cost onto the renter either because the market supply/demand dynamics sets the rental rates, not the owner.
I mentioned the idea in another thread... but yeah... 0% property tax on your first property and primary residence, 1% on the second, 2% on the third...
Still makes it possible to own several houses/apartments (eg. summer home), but makes it impossible to do at a scale that those companies do.
Own a bunch of shell companies that own a single property each.
Real estate ownership is a mess. It can be nearly impossible for people to figure out who actually owns property if the entity buying wishes to remain secret.
Then renters can afford the larger rents, and after the dust settles all you've done is take money from one of the state's pockets and put it in another, no?
ep103|4 years ago
munk-a|4 years ago
One of the issues is that when these sorts of policies initially roll out you tend to see a contradictory effect of sudden spiking in prices as a lot of people who were on the fence suddenly decide to add to the housing market demand - but over time these policies tend to settle in a place where thing are more affordable.
The other issue is that the renewal period for first time home owner benefits is quite long, so if you are exiting a long term relationship or trying to pick yourself up after bankruptcy you can be forced to enter the market as if you were a well established asset holder.
outericky|4 years ago
crate_barre|4 years ago
Entire lifetimes wasted before our eyes. Anyways, maybe we can solve free school lunch finally, seems like that’s what we’re up to.
sjs382|4 years ago
sokoloff|4 years ago
Edit to add: I looked up the exemption calculation. It excludes up to $432,666 from the assessed value. Multiply that exclusion by the rate of 0.00585 ($5.85 per $1K per year) and the exclusion reduces a homeowner's taxes by $2,531.10/yr.
pwned1|4 years ago
dgfitz|4 years ago
Scale it per property === take the average of taxes / homes, pass it along to the renter.
About the only way I can the cost not getting passed to the renter is for a "the government" to set the rental prices as if the home was under a rolling 30-year mortgage, taking into account PITI. Adding a property tax on top of that ONLY to the property owner, maybe exponentially per property owned, could curb companies like Blackrock.
That being said, I have very faith that a "the government" could do this efficiently/correctly/at all. Trying to trace down umbrella corps and whatnot would be cat and mouse. The US government can't even figure out who is cheating on their taxes as it stands.
game_the0ry|4 years ago
You have to consider that legislative members tend to own property and tend to be baby boomers. They are far removed form the experiences that younger generations have to deal with - from their perspective, their home value can go up 20% in 2 years and that will be rationalized as a normal market. They are not talking about it because they are benefiting financially, and talking about may make them hurt financially. This will change, baby boomers cannot live forever even though they behave as though no future generations exist.
fleddr|4 years ago
Many of them may have been just in time to snatch a house from the market, and they see their home value go up. None of them are going to advocate for super high taxes on their "unjust" gains nor will they give a discount to future buyers. They will maximize the return just like everybody else would.
It's not boomer behavior, it's human behavior. Boomers were just lucky to get in earlier. The only annoying thing about some boomers is that they don't acknowledge their luck, and insist it was all due to their hard work or brilliance.
The school going generation always wants a revolution, a redesign of society. To fix its flaws, to make it more fair. It's easy to want to change everything if you have no responsibility or anything to lose. But then they grow up and have skin in the game, and they'll be just like everybody else, protecting whatever wealth they have.
Consider that many boomers were hippies when they were young, rejecting even the notion of personal property. Now they own almost all property. The 21st century version of hippies are even better at managing progressive optics whilst taking in top 1% salaries.
ajsnigrutin|4 years ago
Politicians are probably getting paid of by companies investing in housing and buying up hundreds or thousands of houses, because the price increases make it more profitable than many other investments, and (unless there's some legislative action) makes the investment safer than most other high-profit ones (eg. cryptocurrencies).
And the little guy gets fucked in the end.
donkeyd|4 years ago
Whenever people say anything complex can be fixed easily with legislation, I'm pretty sure they don't have a clue.
These types of issues are never easy to fix, because they're cause by many factors that have taken years to form. There are no easy legislative fixes in practice. They only exist in theory.
theduder99|4 years ago
ajsnigrutin|4 years ago
Still makes it possible to own several houses/apartments (eg. summer home), but makes it impossible to do at a scale that those companies do.
mywittyname|4 years ago
Real estate ownership is a mess. It can be nearly impossible for people to figure out who actually owns property if the entity buying wishes to remain secret.
pkulak|4 years ago
mattnewton|4 years ago
snapetom|4 years ago
webinvest|4 years ago
dionidium|4 years ago
saos|4 years ago
refurb|4 years ago