What happens when the bubble pops?
http://www.citylab.com/housing/2015/05/why-billionaires-dont...
The whole tax penalty is thwarted that way
We still have structural problems in the city property tax code -- for example condo and co-op buildings have to be taxed as if they were rental buildings, a complex calculation that generally undervalues them. But if and when those are fixed, I think full property taxes are would be enough. I don't see the need for a punitive rate on top of that. At least not in NYC, other cities may have a bigger problem with absentee owners.
"In the evenings an eerie stillness settles on [the area]. That’s because these new owners are so rich in both money and global property that their London addresses frequently sit empty, functioning more as dust-sheeted deposit boxes rather than actual homes."
This is not why we have cities. We have cities to allow interaction. Look where the artists, musicians and marginal people are going, for they are the new thing. Hint: it isn't London.
I'm going to throw out Nashville as a thought for musicians, and maybe Pittsburgh for tinkerers.
Now there's some interest in the cheaper seaside towns - Margate, even Bournemouth.
Brighton used to be on that list but it's almost as expensive as London now. Likewise Bath and Bristol. (Not seaside towns, but a big arts scene in the 60s and 70s, now very much gentrified.)
I suspect if people can't get out they'll head West and North. Parts of the West Country are almost affordable. Parts of the North are very affordable, but they're still in the dilapidation phase and don't seem to be in danger of becoming cool yet.
The idea of a tax virus sounds terrifying!
I don't see a problem here. The problem will correct itself eventually, with regular citydwellers all moving to cities smart enough to enact these laws, and abandoning cities like London that become completely unaffordable. Eventually the latter cities will collapse, and these wealthy foreigners' properties will be worthless, like all the $100 houses in Detroit.
There's a tipping point coming fairly soon where voters will logically prefer the short term benefits of protectionism vs additional inequality.
If capitalists want to continue down the path of free trade, they better be prepared to redistribute the additional wealth generated. That or find a way to disenfranchise a whole lot of pissed off citizens.
Technological development has lowered the costs and availability of most things in our lives. If you look at the actual practices of governments and individuals over the last few centuries you won't find much truly free trade. You'll find all kinds of protectionism, exploits of positional control over markets, currency flows (I'm looking at you China), and the occasional super-power deciding to to have a war on ... well slavery was the one that mostly worked.
But free trade? Well, most countries agree that they should be allowed to freely export whatever they want... imports are another matter of course.