[Ekaros]

Wouldn't 20% tax on rent just lead to 25% general increase on rents? I don't think there are that much margin around in leveraged landlords.

Really better would be just to bump something like income tax and use money from there for same purpose.

[hdgvhicv]

If a landlord can charge 1200 instead of 1000 why wouldn’t they? They’ll charge the maximum they can get away with, costs are irrelevant

Two landlords, one with a mortgage, one without, will charge the same amount for the same property.

[Ekaros]

Yes. And the other one is forced to charge 1200. So the other one can charge for example 1190. And the renters will choose the 1190. And then the next renter has to pay 1200.

Or the one without mortgage goes like I only get 800. Maybe instead I just throw this money in government bonds for better gains and save money...

Other option for same outcome could be just to charge any renter 20% on top of their rent. Which they directly pay to this fund. That would push rents down as they are able to pay less. Achieving exactly same effect.

[hdgvhicv]

You’re assuming there’s too much supply, both landlords will be able to rent the unit, one will make more money.

[digitaltrees]

If leads to building that floods the system with supply then rent won’t increase. Landlords and lenders would have to adjust purchase prices and cap rates so valuations would come down. So this would need be gradually phased in until normal. The government would need to support home builders, buyers and landlords. But eventually the housing stock supply increase would match and be tied to new household formation.

At the end of the day most economic activity is really an exercise in ratios. Some states don’t charge sales taxes. Some change double digits. Yet retailers are able to function in both environments.

What is clear is that rental and purchase housing is increasing beyond inflation since 2008 and COVID and that’s not good for tenants or landlords.