Not to be a downer, but how does this fit into personalfinance? Like at all?.. I mean, I agree with the point but this belongs in politics or something.
This is an opinion piece on something that might slightly effect rent. If this is personal finance related than so is literally every economic or business article ever written. Because everything can maybe effect someone’s rent or other expenses.
I’m going to be honest, I see where you come from, and how this is not textbook personal finance.
However, Lemmy is still in its very infancy, and I try to keep this community active. It’s not always easy to find content to post (most of the PF subreddit is usually questions from users), so here it is.
By the way, if you have any interesting content or question, feel free to post as well!
One of the worst parts about house searching is when you look up how much you can get for relatively little if you’re willing to live in impovershed areas in the middle of nowhere. The kind of places defined by the main industry that left the area at least a decade ago.
Then compare it to where you actually have to live die to life and career situations.
Ummm, a lot of people that are NOT rich, own stocks. Like nearly every 401k. If those stocks go up, then there is a tax, it’s called capital gains and goes up for higher income earners.
Also, where I live there is a tax paid on vacant rental property. It’s called property tax. I do not believe people, rich or poor, should be taxed on money they are NOT making. This would hurt owners with a legitimate reason to have a property vacant, like renovations, repairs, or a soft market. So in addition to rent loss the owner would have to pay taxes because the assumption is that the owner is enjoying it?
I don’t think there should be a wealth tax. I think the wealthy should just actually pay some taxes.
You need to go back to school professor. All wealth tax proposals are progressive, only affecting those with substantial investments. I used to dislike them, but a tax starting at 1% on $50 million with the highest rate (say 3%) on net worth above $1 billion wouldn’t hurt anyone.
Also, that tax can’t be avoided either. Even if a billionaire moves to a tropical island with no taxes, their money is still invested in developed countries. It’s too much to invest in tax havens. You just need good KYC to know who the ultimate owner is.
I don’t understand why people have to insult to make a point.
I think eliminating tax loopholes, causing rich people to pay their fair share of taxes, is waaay better than an extra tax on incomes over a certain level. It’s more fair and also doesn’t hurt anyone. Tax avoidance is the reason a wealth tax is even an idea.
Those words mean nothing without specifying which loopholes you mean. I’m not insulting you, I’m just saying that you are trying to sound smart while not contributing anything.
Many landlords don’t even pay taxes on the money they DO make.
They can depreciate a property to offset their income, even though the property is going up in value. The catch is that they have to pay taxes on more of the money they get from selling the property. But if they don’t sell, potentially no taxes for decades. And if they leave it to their kids in their will, no taxes there either and the kid’s cost basis in the property is the market value at the time they received it. So they can start the depreciation all over again.
This is how my non-expert self understands it anyway. It’s part of what draws some people into real estate.
More than that. You can depreciate the building (but not the land) to offset tax on the income but the bill eventually comes due because by depreciating it you’re lowering your cost basis. For example you buy a property for $150k. If you depreciate it long enough it’s worth $0. If you then sell it for $350k you have to pay tax on all $350k, not just the $200k gain in value.
However If you intend to use the proceeds from that sale to buy another investment property or properties you can do a 1031 exchange to roll your adjusted basis into the new property. Thus even when you sell it you don’t have to pay the tax.
As you might, expect tax laws are written to benefit constituencies that politicians value highly. Wealthy donors are among those constituencies.
Some places do have an estate tax (inheritance tax?), but there are often many ways around it and as such class still exists in the UK (say) with its 40% estate tax.
I’ve also heard that the tax can result in an enormous bill to a family that suddenly has a single expensive illiquid asset. Far be it from me to shed a tear for people inheriting over a million dollars or whatever, but it does mean you give up your modest family home in an area whose land value has gone up.
There’s an argument going on elsewhere in the thread whether you’d prefer the government be your landlord, which: a) Yes, in my country. Flat yes. The rate of public housing to demand is quite poor though, but it does exist. And I’ve lived in worse, more expensive, private rentals. b) Cuba has a “rent to buy” system which funds new housing while also meaning that you still build equity on a home over your lifetime. So the government is your landlord but not permanently. And Cuba has less homelessness than much much richer countries. (and c) I’m fine with living in a grey commie-box, but whatever)
At least here in Australia, I’d at least want to see landlords politically disempowered. It’s actually quite hard to find any politician that doesn’t get passive income from owning homes, let alone their portfolio growing in value due to asset appreciation.
Let’s be clear, in the UK, parents can almost always leave behind over a million pounds worth before any tax starts kicking in. Not to mention the thousands of easy ways around it.
The state should stop enforcing the legal rights of landlords to own property and exclude people from its use through physical force, and should organize the people enough that they can defend themselves from retaliation to this change.
Yep, a 100% income tax rate on zero income is zero. It seems a lot of reddit’s financial incompetence is spilling over to lemmy. Also, property taxes exist and are being paid already…
“Income tax on no income” is exactly what imputed income is, as mentioned by OP. Free perks from an employer are, for example, (in the US), taxed as income.
For as long as I’ve been alive, one of the lines I’ve heard is that real estate is always a sound investment. There have also been land taxes for that entire time, most of them being land value taxes. The evidence suggests that the most common form of land value tax, which does not consider how many residential properties an entity owns, is not doing much, if anything, to disincentivize purchasing residential properties as an investment.
A property tax and a land value tax are a bit different: a land value tax taxes the unimproved value of a plot, while a property tax taxes the total value, including the assessed value of the buildings on the land.
One effect of property taxes is that a parking lot downtown pays a fraction of what an apartment building next door pays. With a land value tax, they pay the same, which discourages land speculation by encouraging efficient uses of land.
And we’ve certainly never gone as far as Georgism, which suggests a land value tax as the main or only source of government funding, set to be around what an unimproved lot on the same location would lease for.
Whoa now, let’s not be unreasonable. They can be taxed at a geometric rate, starting at 100% the value of the house and doubling for every one thereafter.
Property taxes do generally work this way. Maybe they should increase property taxes 2-3x, but also raise the homestead exemption so that owning and living in the home is no more expensive.
yeah I wasn’t being serious any actual solution is going to need to be more nuanced than that. Probably involving state provided housing and likely involving high density accomodation. Although it’s a real shame that high density accomodation is archtecturally associated with shoddily built housing intended for people the government doesn’t give a fuck about because palaces and castles are also examples of high density accomodation.
I think the ideal solution would look like high density state provided housing that is designed to be beautiful and pleasant to live in.
Well eminent domain says we have to pay you a fair rate for the house. The property was taxed $2000 and earned no income last year so here’s a bill for $40,000.
183 days. You self-declare unless the government has a reason to audit. This is a solved problem already and we’ve been going by these standards for decades.
It’s called establishing a domicile in tax terminology.
It’s not on my ID, though. And even if it were, they’d need a way to monitor actual occupancy over time and there’s no way that wouldn’t be invasive.
It’s common and reasonable to be away from home for months at a time, and you have a right to travel. I can only imagine the burden this would place on someone who’s away for medical treatment or supporting a distant family member. Or just out of the house for renovations or an issue they can’t afford to fix currently.
The administrative burden alone would be huge before you get to unintended consequences.
I can still buy a car and have it just sit there. The driving part is due to affliction of other people’s well being. Me raising the money to buy a house and deciding I want it as a summer stay location, so I leave it sitting there while I’m somewhere else would have no harm on another’s life.
I believe that you should be able to keep a property empty if you choose, it should just be taxed in a way that’s proportionate to the damage it causes to the community.
Empty properties inflate housing costs -> Increased housing costs reduce the amount of people willing to live in the area -> Which reduces the amount of people able to work for local businesses.
They could now if they wanted. Most lakes are government or private property. You think they’d want to lose profit margin?
Not to mention the massive difference again, the wellbeing of other people. Houses are crafted by skilled workers, it’s not a right to their labor, nor a right to the owner’s property who purchased it after it was built. You do however have a naturalized right to survival.
The point is, property taxes are fine but saying “um you should be forced by the government to use something you own in a specific manner” is nonsensical and authoritarian overreach at minimum.
Income tax on no income sounds fucking stupid. Just up property tax on the 3th or 4th house or apartment by a fuckton, watch everyone panic sell their shit crashing the housing market into oblivion and call it a day. Ez affordable housing.
Most landlords are like massive corporations, if all the property your corporation owned suddenly exploded it may rise a few eyebrows. Someone’s rich aunt renting their second summer home isn’t having that much of a detrimental effect on the housing market as corpos buying up all available housing.
My point is they would find some way to legally dispose of their stock to artificially decrease supply and raise prices again. Its particularly the big corporations who would do this.
Maybe but then like stop whatever loophole they are using. Doing nothing is quite a lot worse.
Thankfully the housing market is still fine in my country so I don’t have a dog in the race but people in the US should take some pointers from the French and fucking riot at this point. All of yall have like 5 guns per person yet you are like the most demure country when it comes to politicians and corpos just exploiting the fuck out of you.
people in the US should take some pointers from the French and fucking riot at this point. All of yall have like 5 guns per person yet you are like the most demure country when it comes to politicians and corpos just exploiting the fuck out of you.
Careful, that kind of talk gets you labeled a tankie
Yeah, there was just recently a big scandal in my city where one guy bought 20 houses with 9 shell companies. Attempted to do shitty flipping jobs. Selling the houses from one company to the next so they didn’t immediately jump up in price in the real estate history.
The sad part is: if he hadn’t overpriced the market and sold more of them he would’ve gotten away with it, but he waited too long and got stuck. But until that point nobody knew one guy had 20 houses, it was 2 per company on paper.
Every single one of all the government measures I’ve seen to “help people” in the current “tight housing market” is designed to prop-up housing prices and rents, never ever anything which would lower rents or house prices.
In my country they even given money to renters rather than, say, impose rent controls or start large projects building public housing.
From my own experience working in Finance every single government measure I see sure looks a lot like using the power of the State for manipulating the housing market to push prices up.
Denmark applies a property tax to foreign properties at ones disposal. If it’s rented, it’s waived and tax is levied on the rental income. If it’s unoccupied, it’s considered a luxury available for your use and thus is taxable property, even though it’s in a foreign jurisdiction.
How are you supposed to keep them from passing on the cost of taxes to their tenants?
You have to realize that they still “own” a limited resource that lends them power to leverage over others. The only way you make this abuse go away is to have the people collectively own the land. Any accommodating regulations you place on landlords will only be temporary until they are worn down and removed.
I hear this argument a lot and it’s a trick to get the libs to not support taxes against landlords. In this situation, rental rates are dictated by how much the market can bare because there just aren’t enough houses. Prices are set to the maximum so landlords would bare the cost of the tax rather than renters. If the taxation threat was real and long term enough, it would incentivize landlords to do something with empty units, rather than it not costing them anything to sit on it.
ITT: “If not for ticket scalpers, concerts wouldn’t happen! They’re providing a valuable service by hoovering up supply with their high capital and low morals, and then drip feeding it back to us at increased prices! Ticket scalpers, by buying all tickets at once, increase demand for bigger concerts, a net win for everyone!”
Anyway, yes, it won’t fix the whole systemic issue and calling it an “income tax” is silly (it can just be a tax), but if the way to get you over the line is getting landlords to pay extra for empty apartments/houses so be it.
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