I don’t think owning a second home per se is wrong or evil. Many people can’t afford buying a house due to the upfront costs. But owning a second home and leaving it empty for years? Owning multiple homes to use as Airbnbs in residential areas? I really wish this was regulated. But it will never be because there’s big bucks being made there.
I’m even ok with them owning a second house - but I think simple, easily understood answers are what’s called for in this day and age (nuance is so easily corrupted) so here’s my pitch
You have a second house? If it’s empty for 6 months, your taxes start going up. By a year it should be more then the house value rises, and it should just keep going up
Same with apartments and any property opening companies. Honestly, I’d be fine saying it all starts when your household owns at least three homes
You can surrender the house to the government to be rented at cost, maybe for a tax write-off for the first 10 years or something, otherwise it should just keep rising to insane levels.
I want people begging for renters. Developers should slash their prices to move units quickly - it’ll incentivize more affordable housing. Hell, I want landlords so desperate they pay people to inhabit them for a fixed time period.
And that’s why I like 3 - you had to move and your house isn’t selling? I don’t want to screw over individuals, there’s easier people to. You have a vacation house? Fine, but if you move you better get your empty house sold.
It’ll cause all kinds of problems, but we have empty homes and homeless people - that’s just uncivilized
Unfortunately this won’t solve the housing problem. It’ll just cause the demolition of perfectly fine houses to avoid increasing costs and new homes would only be built if there are people that signed a tenancy agreement beforehand.
The market would shift from readily available but empty homes to yet to build homes.
The homeless wouldn’t magically have money for rent. So the homes stay empty. Nobody would buy them either because then they’ll have to burden the ever increasing costs.
Not to mention demolition requires permitting. Municipalities don’t just hand you a permit just because you asked. If you wanted to demolish a perfectly good house, they’d be asking questions.
Why would they demolish homes? They’d have ways to make some money off them vs none - either they sell at a loss, take a tax write-off to surrender it, or they spend a significant fraction of the construction cost to tear it down to resell the land
It would definitely flip the current real estate development industry upside down, but I don’t see that as a big negative - being a landlord is still very profitable, so investors will still want to do it. But you can’t let units go empty, so they’ll be going for affordable or in demand housing rather than highest profit margin (aka McMansions)
Plus, it’s estimated that up to 1/3 of housing in the US is empty - the homes exist, they’re just sitting empty. I’m not sure if that counts stuff like air BNB or not either.
Eventually, these buildings are going to age out and need to be replaced, which my plan would throw some hiccups into - but that gives us time to fix things without forcing people to die on the streets
I like your thinking. Personally, I prefer easier schemes that are difficult to avoid.
Schemes like yours, while good on paper, are often circumvented through shell companies and foreign residency.
I prefer a scheme where we just tax all real estate at a quite high rate, somewhere in the 1-5% range. Let’s say that a simple apartment would then result in €5K tax. A family home €10K.
Every citizen gets to subtract up to €5K of property tax from their income tax. So a family might pay €20K income tax, but can subtract €10K.
End result is a progressive property tax, which actually decreases tax on normal people.
People with expensive homes, foreign owners of homes and people who own multiple homes would be paying significantly more tax without the possibility to subtract it
I have two problems with that - first, it doesn’t directly address empty homes. Housing could still be commoditized, they just pay a larger tax - if they can make property prices go up even faster it would eat the difference
Second, messaging - people will hear that and ask “what does that mean for my property tax?” endlessly. It doesn’t matter even if every individual would pay less, it’s too mathematical and people won’t do the math - they’ll listen to their favorite voices tell them what it means
The nice thing about my idea is that it would crash the housing market, but it would do it by playing on a sense of justice. How is someone going to stand up and say “why can’t I have a bunch of empty houses while we have homeless camps?”. Many people would resist, but they have to do it while sounding like entitled assholes
Also, I think it would work for foreign investors and shell companies perfectly - see, it doesn’t matter who owns the home, it matters who claims to live in it
A company doesn’t live in a house. A foreigner can’t say they’re living their 6 months of the year when they’re not in the country that long. A resident can claim a house and a secondary home (however that works out), but companies can’t claim any - they need actual people to live in the home or it’s vacant.
You put the fact the house is occupied first, then figure out who to tax and how much after - it doesn’t matter what shell games you play, the only way around that is straight up fraud
I don’t think owning a second home per se is wrong or evil. Many people can’t afford buying a house due to the upfront costs. But owning a second home and leaving it empty for years? Owning multiple homes to use as Airbnbs in residential areas? I really wish this was regulated. But it will never be because there’s big bucks being made there.
I’m even ok with them owning a second house - but I think simple, easily understood answers are what’s called for in this day and age (nuance is so easily corrupted) so here’s my pitch
You have a second house? If it’s empty for 6 months, your taxes start going up. By a year it should be more then the house value rises, and it should just keep going up
Same with apartments and any property opening companies. Honestly, I’d be fine saying it all starts when your household owns at least three homes
You can surrender the house to the government to be rented at cost, maybe for a tax write-off for the first 10 years or something, otherwise it should just keep rising to insane levels.
I want people begging for renters. Developers should slash their prices to move units quickly - it’ll incentivize more affordable housing. Hell, I want landlords so desperate they pay people to inhabit them for a fixed time period.
And that’s why I like 3 - you had to move and your house isn’t selling? I don’t want to screw over individuals, there’s easier people to. You have a vacation house? Fine, but if you move you better get your empty house sold.
It’ll cause all kinds of problems, but we have empty homes and homeless people - that’s just uncivilized
Unfortunately this won’t solve the housing problem. It’ll just cause the demolition of perfectly fine houses to avoid increasing costs and new homes would only be built if there are people that signed a tenancy agreement beforehand.
The market would shift from readily available but empty homes to yet to build homes.
Why would they demolish houses rather than selling them? Makes no economic sense.
Who would buy a house that would only cost you?
The homeless wouldn’t magically have money for rent. So the homes stay empty. Nobody would buy them either because then they’ll have to burden the ever increasing costs.
A nominal fee from a heavily discounted sale is still more than spending money on a demolition.
Not to mention demolition requires permitting. Municipalities don’t just hand you a permit just because you asked. If you wanted to demolish a perfectly good house, they’d be asking questions.
Why would they demolish homes? They’d have ways to make some money off them vs none - either they sell at a loss, take a tax write-off to surrender it, or they spend a significant fraction of the construction cost to tear it down to resell the land
It would definitely flip the current real estate development industry upside down, but I don’t see that as a big negative - being a landlord is still very profitable, so investors will still want to do it. But you can’t let units go empty, so they’ll be going for affordable or in demand housing rather than highest profit margin (aka McMansions)
Plus, it’s estimated that up to 1/3 of housing in the US is empty - the homes exist, they’re just sitting empty. I’m not sure if that counts stuff like air BNB or not either.
Eventually, these buildings are going to age out and need to be replaced, which my plan would throw some hiccups into - but that gives us time to fix things without forcing people to die on the streets
I like your thinking. Personally, I prefer easier schemes that are difficult to avoid.
Schemes like yours, while good on paper, are often circumvented through shell companies and foreign residency.
I prefer a scheme where we just tax all real estate at a quite high rate, somewhere in the 1-5% range. Let’s say that a simple apartment would then result in €5K tax. A family home €10K.
Every citizen gets to subtract up to €5K of property tax from their income tax. So a family might pay €20K income tax, but can subtract €10K.
End result is a progressive property tax, which actually decreases tax on normal people.
People with expensive homes, foreign owners of homes and people who own multiple homes would be paying significantly more tax without the possibility to subtract it
I have two problems with that - first, it doesn’t directly address empty homes. Housing could still be commoditized, they just pay a larger tax - if they can make property prices go up even faster it would eat the difference
Second, messaging - people will hear that and ask “what does that mean for my property tax?” endlessly. It doesn’t matter even if every individual would pay less, it’s too mathematical and people won’t do the math - they’ll listen to their favorite voices tell them what it means
The nice thing about my idea is that it would crash the housing market, but it would do it by playing on a sense of justice. How is someone going to stand up and say “why can’t I have a bunch of empty houses while we have homeless camps?”. Many people would resist, but they have to do it while sounding like entitled assholes
Also, I think it would work for foreign investors and shell companies perfectly - see, it doesn’t matter who owns the home, it matters who claims to live in it
A company doesn’t live in a house. A foreigner can’t say they’re living their 6 months of the year when they’re not in the country that long. A resident can claim a house and a secondary home (however that works out), but companies can’t claim any - they need actual people to live in the home or it’s vacant.
You put the fact the house is occupied first, then figure out who to tax and how much after - it doesn’t matter what shell games you play, the only way around that is straight up fraud
Yes, people are sadly dumb and fall for bad messaging. I recognize that as a weakness.
The messaging should therefore be: lower property taxes for normal people by making it progressive and combating tax evasion by foreign investors.
My scheme significantly empowers normal people vs. speculators/investors. Speculators need a positive return to justify their investment.
Therefore, it will basically put a moat around the housing market that greatly benefits owner-occupiers.