And then the owners can do what they did in Vancouver and rent the properties out to students for a couple months before tax time, claim the lots aren't vacant and avoid the tax, then jack up the rent so high they're forced to move.
A better variant was proposed by an economist at UBC (Tom Davidoff). There would be a high property tax on ALL properties, which you could reduce by the amount of income tax you actually pay in the province.
Whether the property is vacant or not, the tax must be paid. But if you actually pay taxes for working here, it’s cool.
A large investment property would probably cost several tens of thousands of dollars in property tax per year? Not many residents probably pay that much income tax, what do you do with those?
I didn’t capture Davidoff’s proposal accurately. There is a basic property tax that everyone pays. An additional tax is the one that you can write down to zero by earning income.
Even better, just aggressively tax owners based on the land value. This requires them to either eat high costs for their speculation, or use it for income-producing purposes (someplace to live or someplace to work).
What about the old people who didn't buy a house a long time back and now face high rents? Why is it always a selective group of old people we are supposed to carefully design policy to perfectly accommodate?
High enough land value tax, consistently applied, will make the land cheaper and affordable to said old couple, because it neutralizes the phenomenon that land continuously increases in value as long as the population keeps growing.
Applying a tax commensurate with income-earning potential is the usual explanation.
Given the wide range of possible incomes to various professions, this can be problematic. Your $7.25/hr federal minimum wage worker ($14,500/year) competes against a $290k/yr SV tech worker, with 20x the income. Unless that's mitigated by other factors (residence size, amenities, etc.), a land tax might prove further discriminatory.
But in general, a tax that's sufficient to kill the prospects of real estate as simply a bankable nonproductive asset would be a net benefit.
why should property tax only be a function of property? Shouldn't property tax be a little like income tax and also be a function of the 'ability to pay'= Function(wealth, income,dependents)
There are ... some ways of achieving this somewhat equitably.
One of the notions behind property tax is to make efficient use of land -- someone simply squatting on a property and not contributing to the local economy is a less efficient use than someone who's actively engaged. In particular, high-density uses are preferable to low, where land value is high.
That conflicts with the notion of neighbourhood and social stability. Kicking out pensioners (or young families) simply because they cannot afford to pay taxes ... is highly disruptive. For a sufficiently growing market, it need not be a necessary problem, tough much experience with gentrification (or its less genteel earlier forms of land appropriation and expropriation) show.
One possible compromise is to allow taxes to accumulate, but to factor against the value of the property itself. When the property is sold (or transfered in estate), those taxes come due, and are debited agains the value of the property. You don't evict those unable to pay, but the benefits of squatting do come with an (ultimate) cost. That cost is also a bankable asset to the government authority, who can consider this a future receivable.
I would be okay with, for example, demonstrating that a property was my primary address, perhaps via affidavit, or in the case where I was renting, providing a signed lease.
Your comment makes it sound like the Gov't would start requiring some incredibly invasive monitoring. I think it more likely would merely require documentation and sworn statements similar to what we have long done with just about everything that is taxed.
Only the high value suspicious ones. If a residence in a high value area is claimed as occupied, but no one put it on their drivers licenses/ID or any other existing government interaction then request additional documentation. Let neighbors report vacant property and require multi-family building administrators to report suspiciously under utilized units.
in the age of deep learning, streetview and daily satellite images it should be possible to determine automatically. Of course such an operation opens the door to all sorts of surveillance.
I quickly read the second link you provided and didn't see anything backing up your claim about landlords jacking up rents but I could have missed it. It's also worth noting that there are laws that prevent large rent increases in Vancouver.
I live in Vancouver, and the vacancy and foreign ownership taxes have moderately improved the rental situation. It has also just encouraged the worst types of buyers to move onto other jurisdictions.
To be effective, they probably need to have the tax rates on an elevator until the market corrects though.
And if we started treating behavior like this as equivalent to the search for bug bounties, we could iteratively patch the law until it is no longer cost-effective to search for them.
This. I was working with a startup and on my first day onsite, I was sat next to the company lawyer. He told me he had just finished up a contract that was riddled with landmines. He seemed so proud of himself.
At a later point when renegotiating, I was given one of these dangerous contracts to sign. When I brought to light my concerns, said lawyer set up a face to face with me. His first words were, "If you weren't an engineer, you would have made a good lawyer."
Somewhat jokingly, somewhat seriously: I wish that laws and changes to them were organized and published like repos and pull requests on github.
It'd be such a lead forward in transparency if 'bugs' (loopholes), authors, and proposed changes were out in the open -- and the history and reasoning behind them equally public.
In theory I think this is the way many countries legal systems already work: the case law and regulations are technically public. But it's generally only accessible (in both the sense of retrieval, and also in the sense of understanding the language) to subject experts.
Software bugs and proposed changes _are_ accessible only to subject experts, or people keen enough wrt. software to be of above average technological competence.
The only difference is, were the subject matter experts in the domain where GitHub and the likes rule.
At least where I live, court records are accessible to the lay person (after clearing some hurdles). Will anyone look at them aside from lawyers and law students? Probably not...
Greater transparency in lawmaking and governance is always a good thing, though, and most government's don't achieve it to any great extent.
In the UK we have council tax which is a fee to local government paid monthly for services like road maintenance and waste disposal. In recent years the majority of councils have started charging double the rate on properties that are empty, even for just one month. I hope this will start to balance the disparity between empty houses and the number of homeless people.
That would have a very regressive effect on those who don't have the capital or credit to outright own their home barring largly outmoded
boarding house style rentals. That property tax would be passed on to the renters.
The best way to implement that is with a local income tax credit, at least for cities with an income tax.
That is, double the property tax but offer half of it as a rebate to, and only to, people paying the local income tax (i.e. residents)—-including owner-residents and renters on a pro rata basis.
I'd rather radically reduce building restrictions and crash the housing market so more people can find adorable housing and this houses stop being good cash sinks.
How about massive social housing projects that provide high quality affordable housing to anyone who wants it? I'm sick of living in over-priced rentals that are hideous, cookie-cutter, stacked, shoe boxes, all built shoddily in a rush, filled with the same terrible finishings and appliances and never maintained by their owners/management. Force these investors to do a decent job by making them compete with actually good and reasonably-priced alternatives.
The primary residence scam is popular. Pretend to live there, pay no capital gains. Especially lucrative if you tear down and old junker and build a fourplex and laneway house.
How about bulking better train and commute options? This will give people to live far away from their work place, yet keep roads free and will reduce pressure on properties. At least in the Bay Area, Bart, Caltrain, VTA and the bus’s system is a joke, this forces people to move in closer. Another issue clogging the roads is they are now open to all EVs, car pooling should be 3 or more people.
"Modest single-family homes, owned for generations by families, now are held by corporate vehicles with names that appear to be little more than jumbles of letters and punctuation – such as SC-TUSCA LLC, CNS1975 LLC – registered to law offices and post office boxes miles away. New glittering towers filled with owned but empty condos look down over our cities, as residents below struggle to find any available housing."
Yes, but that's definitely not the main point here. There is a seemingly huge money laundering operation at play.
And either FinCEN is not disclosing so it can get to the point of making charges or it's providing cover for those in power. Probably a combination of both, honestly.
What I've read and heard is that things like KYC/AML laws made real estate the preferred vehicle for money laundering. This coincides with the first housing bubble quite nicely and also explains why housing reinflated to bubble values after the financial crash.
Politically it's very hard to address this problem because it benefits existing homeowners (especially those who bought long ago) and developers. Those are two extremely powerful constituencies.
So much biased language in that quote. Could just be "Many entry-level single-family homes are now corporate-owned, while luxury condo towers have owned but unoccupied units."
Yes? It drives up housing costs for everyone else. Which may sort itself out in the very long term (on the scale of decades), with sane people moving elsewhere and siting companies elsewhere, but in the shorter term you have a finite number of job opportunities, and (except for remote workers, obviously) you have to live one of those places, and every unoccupied residential property forces you to live farther from work or pay more (reduced supply).
Seems like it's mostly stuff like bans on multifamily buildings, mandatory wasted space between the home and the sidewalk, mandatory parking spaces, and multi-year permitting processes that drive up housing costs.
There's no inherent reason why "job opportunities" have to be in only a very few places.
I'm not sure anyway that local workers are fundamentally more entitled to be allowed to buy property than other groups of people who might want to spend money to acquire real property.
Okay, but these opportunities still are in only a very few places and housing is a necessity. A human right, if you will. So the issue of housing needs to be addressed in all ways possible, including making sure that properties aren't left off the market.
You should note that "owning" a property that you don't live in (or rent out) also requires the use of force -- state force to remove anybody attempting to actually use the space.
I suspect you're trying to make a pro-liberty / property rights point, in which case I think you should consider more carefully the basis of justified property ownership.
Even if you are inside it 100% of the time, it requires violence or the threat of violence to defend against trespassers that might just try to violently throw you out.
Violence is an inherent aspect of human affairs, so the question in every case isn’t whether violence is necessary but rather whether it’s justified.
https://www.bloomberg.com/news/features/2019-04-16/college-k...
https://www.theglobeandmail.com/real-estate/vancouver/in-van...