Easily solved by not hitting people who own one property which is their primary residence.
I'd go easy on two-property people; some people need two places for various reasons, and they occupy both.
The tax rules can be crafted such that heavy penalties are imposed on people with three or more properties, and on house flipping activity.
Only reason you don't see more of that is because, doh, the rules are written by the rich. The politicians themselves or their rich chums are doing a lot of that speculating.
This would discourage individuals from renting out their property for a small profit, which is exactly what you want to see more of to increase affordability (and liveability — not everyone likes renting from big investment firms and property management companies).
That is because they themselves have to live somewhere. If they have to rent, then what have we achieved?
Harassing these people is entirely regressive.
People doing something entirely normal, like buying a place and living in it, are not the root cause of any problem.
(OK, I've heard of the practice of sleeping under the desk at work and using the company kitchen and shower, while AirBnB'ing your apartment for $. Good luck with that if you have a family.)
Alternatively, and worse still, it might erode profit margins such that rentals become exclusively the domain of big investment firms. How is this of benefit to ordinary renters?
I'm with you about the undesirability of these investment firms who hog up properties; the tax structure could easily be set up to squeeze them out, while encouraging the small owner rentals: people who have two or three places.
These firms are basically parasites who contribute to the housing problem as much as home flipping speculators. It should be entirely unprofitable for someone to have like twelve properties. We simply cannot have that in cities where affordability is spiraling out of control.
Maybe once upon a time chains of managed condo buildings and such owned by big companies wasn't a problem; it could be high time to crack down on it.
But that tax structure would put downward pressure on rental unit availability, which would very likely raise rents. Wasn’t the goal of all this to solve housing affordability?
> It should be entirely unprofitable for someone to have like twelve properties.
Someone, as in ... a human? What about LLCs? It’s easy and simple to form several of them.
As someone who owns no real estate, and strongly prefers renting from individuals, my concern is all these plans to make it harder for individuals to own several properties will make it even harder than it already is to find a good deal as a renter.
What's the fallout from that? Let's keep this going and see if it reaches sustainable or insane.
You mean, what’s the fallout of banning anyone or any business regardless of the circumstances from owning more than one property?
Starting with the obvious one, it incentivizes investors to form multiple legal entities to own multiple properties — thereby entirely defeating the proposed regulations. This is already how it works today amongst informed property investors (though for reasons of legal liability, privacy and wealth protection rather than skirting regulations).
But assuming you could close this (realistically impossible to close) loophole... I’m guessing people in this hypothetical fantasy would prefer buying huge tracts of land, and building ADUs? Rentals would likely become a lot more scarce. Maybe corruption would rise due to the general ridiculousness of the proposed regs. Dunno. What do you think?
How it could work is that a residential property must be registered to an individual's social insurance number, not to a corporation.
So then they will have to start inventing people if they want to shelter their activities.
These people can be audited. How did you get the title to this property? From whom? Where is the mortgage in your name? How come you're not actually paying the mortgage? Etc.
You can't hide the fact that you didn't buy that property from the tax man.
In you can get business visa in you invest X amount into a company, it can be in construction but not a property, house-flipping or rentals
Nobody is entitled to live in the same space forever. It’s perfectly reasonable and expected for for someone on a fixed income to sell their appreciated home rather than paying the higher upkeep. If the value proposition makes sense for someone with a higher income then they’ll fill the void. If not, the price will drop and it will all adjust anyway.
The alternative is to end up like CA and we all know the shit show that has become.
The Medicaid look back period for assets is five years.
The real “trick” is to have kids, raise them right, and then get old knowing that they’ll do what’s right. Whether that’s taking you in, putting you in a home, or kicking you to the curb is all a matter of what you teach them.
This should also apply to rent control.
I propose a complete overhaul to this tax. We make this tax a federal tax, no exclusion allowed for any reason. Increase this tax rate to about 8% of the property value meaning if the property is worth USD 1M, you owe USD 80k in property tax each year. No exclusions for anyone. Walmart pays. Megachurches pay. Amazon.com pays. Yes, even the state capitol pays and public schools pays.
Now, to make the math work, we must make a calculation we revise each year. What is the median price of a two bedroom unit in the nation? Every adult gets this allowance for the year. Ideally, this more than offsets the cost of the property tax for this person. If it doesn't, the person is responsible for the difference.
The beauty of this scheme is every building pays and failure to pay for about five to ten years is enough to confiscate the property and put it back in circulation. Everyone has some money for housing. If some place is too expensive, move elsewhere and make money.
$80,000 is what, twice the median income?
But you don’t want to kick someone out of a house they bought because property taxes went up. That property taxes have increased so much that this is even possible is concerning. They shouldn’t go up that much.
The housing issues in California come down to regulation making it expensive and difficult to build, and just way too many people wanting to move somewhere with some of the best weather and natural features and jobs in the world. That California is inherently expensive shouldn’t be controversial or surprising.
If you tax the ownership, that's property tax, it already exists, and 1) It's already high in the most HCOL states (imagine paying 30K a year for a property worth 750K, that's Westchester, NY or many parts of NJ, and a handful of other states) 2) Imagine you're 75, retired, and suddenly your property tax spikes and the house you bought 20 years ago for 150 is now worth 750K, and now you're on the hook for 30K.
So that's out. Next we have taxing transactions. OK, so we up flip taxes (ownership less than X months), we increase transaction taxes on a sale, we can even rid ourselves of the cap gains tax exclusion for single and married couples, and perhaps even tax everything as short-term cap gains.
So now people will never sell.
What have you accomplished?
Or were you just expressing your emotions and letting others figure out the incredibly complicated logistics of your suggestions?