If you’re paying 6%/year in property taxes, a home is no longer an “investment”, and the house hoarding (especially by the likes of investors buying single-family housing) will cease. People will buy homes to have a place to live, and the market will cool off.
This comes with the additional benefit of progressively taxing wealth instead of solely income. Wealth discrepancy is orders of magnitude worse than income discrepancy, and currently we’re doing almost nothing about that.
There are heaps of advantages to this approach, like no capital flight (can't take land overseas with you), no economic inefficiencies (taxing land doesn't get rid of land, whereas taxing pretty much anything else reduces the supply of that thing, taxing land doesn't reduce house-building the way property taxes do).
There's nothing in society that says we need to "compensate" new taxes by getting rid of older ones. If we as a society decide that someone's speculative actions are harmful, there is no good reason not to tax them into oblivion
Yet now the correct choice is supposed to be made in regard to property ownership social "harm", using taxes as the specific tool to correct it?
If the government, or "we as a society", can't directly justify their goal being enforced via restrictive law then enforcing the goal via taxation isn't democratically justified (ie: an incentive provided for the tax collecting gov).
>no more of these halfbaked tax reform ideas.
Why would US citizens be in favor of tax reform? What a crazy idea that has zero historical precedent.
But I don't feel like having this discussion with someone who by all likely hood wouldn't be affected by this issue since they don't own any rental properties to begin with, wouldn't be affected by this in any way, and is just making an argument from an ideological reflex
Not every country is a corrupt failed state and plenty of western representative democracies have acted on behalf of their constituents best interests
If you dont make a good faith argument but instead throw your hands up saying "they're all crooks anyway" then what's the point of even trying?
It wouldn't accomplish that. The big investors would just shrug, keep buying houses and renting them out, passing your 6% to the renter to pay. Meanwhile regular people would be priced out of their home by taxes, reducing home ownership even further and those big investors would snap up those homes. Repeat cycle until those corporations own 100% of all properties.
You want to incentivize owning and living a home, so I would do 0% tax on primary residence (up to some value limit), maybe 5% on a second home and ratcheting steeply up from there on each additional property owned by a person or entity.
That would wipe out the corporations owning hundreds of homes since they would not be able to profitably rent them out if they're paying 100+% tax on each. Meanwhile regular people can live in the only home they own without tax.
Can’t just property tax a fixed amount.
We want most people to affordably own a primary home (their primary address) may be have a vacation or side rental at higher property tax and heavily discourage investors sitting on an array of homes primarily for rent seeking.
The correct solution is crush nimbyism and zone land and speed permitting to fulfill need rather than to create artificial scarcity. Japan and Germany, among other provide various flavors of this working. I prefer japans method of moving zoning to a national body (in north america this would be at stae or province level) and zoning for national interest, which means allowing lots more density than we have now and allowing substantially faster, easier, and cheaper permit approval. On the demand side we can get rid of subsidy programs like cmhc that provide a naive backstop to allow 5% or no money down buying.
This doesn't mean anything. It just states the obvious, which is that people who can afford super expensive houses tend to be rich.
I don't see a crash coming, I see stalling economies as all the well just locks itself up in housing for a generation.
Prices of homes vary greatly. If your parents owned an apartment in a unappealing town, that won't pay your bay area house. Conversely, you may not be able to afford a house in the bay area while working there, but save enough in one year to buy a house somewhere else.
Maybe I'm wrong, but I wouldn't be surprised if the parents and grandparents lived more frugally. Spending more than you earn will make you poor regardless of income.
> The catch is that in order to become a homeowner, “you need wealth to get more wealth,” as Ms. Kuhn put it.
We're approaching a Neo-Feudalism society where the only people who will be able to afford to buy homes are those whose parents and grandparents were able to buy homes.
Tbh if you replaced "Switzerland" here with "Canada" this article reads the same as many other articles I've read recently. This is becoming a very common problem in many jurisdictions.
I think the spiking costs of housing and incredible rent seeking is/will have really bad impacts on the economy as more and more wealth is devoted purely to housing and unavailable for anything else.
I'm lucky enough to have been able to buy property and to have stability of housing tenure, but as a result, despite posting this comment on an entrepreneurial tech forum, I couldn't imagine being able to create a startup right now or ever. Where would the money come from? All my money is going toward housing costs.
This is the big problem as rents (both from landlords and other oligopolies) take up a bigger and bigger share of people's income. No money for creating a new business, and no money for customers to spend at a new business. Everyone suffers.