Landlords should have to pay income tax on their rental properties regardless of whether they're rented out or not. ( gothamist.com )

cross-posted from: lemmy.crimedad.work/post/12162

Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there’s still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.

SpaceCadet ,
@SpaceCadet@feddit.nl avatar

That’s how it is here in Belgium. I pay tax on the income I would get if I would rent out my apartment, even when I’m actually living in it.

Luckily the amounts are based on rent prices as they were in 1975. It’s indexed, which means it gets adjusted for (general) inflation, but not for the increased prices in the housing market which is much higher than inflation.

DessertStorms ,
@DessertStorms@kbin.social avatar

Luckily

for landlords.
Not for the tax pot and the general good.

SpaceCadet ,
@SpaceCadet@feddit.nl avatar

No not for landlords, for homeowners. As it is, it’s just an unfair tax that increases the cost of homeownership, making it unattainable for lower incomes. If they wanted to target landlords, they should tax actual rent income instead.

Of course, no tax ever gets abolished because the government starts to rely on it in their budget, so we’ll be stuck with this forever.

flan ,
@flan@hexbear.net avatar

why is that lucky?

keepcarrot ,

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.

flan ,
@flan@hexbear.net avatar

they provide tiquidity

phthalocyanin ,
@phthalocyanin@lemmy.world avatar

landlords ought not exist

ProxyTheAwesome ,

There just should not be landlords

FluffyPotato ,

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.

captcha ,

But then the almighty homeowners home value might collapse too!

But for real landlords wohld start destroying their own housing stock to take some tax write off or insurance fraud.

FluffyPotato ,

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.

captcha ,

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.

FluffyPotato ,

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.

ImmortanStalin ,

Really shows the propaganda power.

Venus ,
@Venus@hexbear.net avatar

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

context ,
@context@hexbear.net avatar

Just up property tax on the 3th or 4th house or apartment by a fuckton

Maybe but then like stop whatever loophole they are using.

just do a few things that are against the interests of the ruling class! it’s easy! they never react with overwhelming violence!

el_bhm ,

Multiple holder companies incoming. Now that will need to be plugged up.

Not saying this is a bad idea. But they will find loopholes.

RegularGoose ,

Don’t allow companies to own homes. Homes should not be investments.

Aux ,

Then renters will be homeless.

battleoften ,
  1. Require rental properties to be registered and report when vacant.
  2. Block any new single dwelling rental property purchases.
  3. Only allow more rental property purchases when vacancy rate is below a certain threshold in a metropolitan area.
Rekliner ,

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.

Aceticon ,

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.

wolfpack86 ,

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.

bluGill ,

What are the unintended consequences of this proposal? It is amazing how many people replying to this topic have proposed something without considering what effect it will have. Sure there is a problem, but most solutions have serious negative downsides.

krashmo ,

I don’t think people care about the downsides for landlords anymore. Real or imagined, perceived greed is what people blame for high rent costs. They’re ready to make greedy landlords suffer as they have and I can’t say I blame them one bit.

BraveSirZaphod ,
@BraveSirZaphod@kbin.social avatar

The fundamental misunderstanding in this view, IMO, is that greed is not something that landowners are uniquely equipped with. Rice is cheap as hell; are rice producers simply not greedy, and that's why rice is cheap? No, it's because an absolutely massive amount of rice is produced every day, and there's more than enough around to ensure anyone who wants rice can get it. Slightly more abstractly, there is more than enough supply to meet the demand. And like housing, cheap food is an absolute need. But unlike food, housing has been woefully underproduced for decades now in cities, and government policy has done a lot to cause that. It's illegal to build denser than single-family homes in most urban land, and the aim of policy has been more to protect people's investments rather than have housing be affordable - two goals that are fundamentally at odds with each other.

This isn't a coincidence, of course. A lot of federal housing policy goes back to the 50s and 60s, when you had suburbs that literally banned people of color from living in them. Housing policy was explicitly designed to advantage landowners and penalize renters, which is to say, wealthier white families pursuing The American Dream™ and urban Black families whose neighborhoods were systematically redlined and demolished to build highways for white suburbanites.

krashmo ,

Sure, all that’s true, but it doesn’t invalidate what I’m saying. I think people are angry and ready to get out the pitchforks. There’s been decades of policy debate with no actual improvements to the situation. People think politicians and the wealthy are using discussions like the one you’re trying to have to delay meaningful change rather than find an agreeable solution for all parties. That’s not to say you’re wrong but you’re assuming people want to avoid punitive action and I don’t think that’s true.

BraveSirZaphod ,
@BraveSirZaphod@kbin.social avatar

Totally agree with you; this frustration is a direct and obvious result of decades of policy failures. I just worry that a lot of the ensuing anger is a bit misplaced.

I do think that there's been a sharp acceleration in recent years towards actual concrete steps, even though they're not super flashy and will take more time to see results. There's been real progress towards zoning reform, abolishing parking minimums, and other bits of red tape that have played a huge role in housing costs exploding.

krashmo ,

It probably will end with some poor decisions being made but sometimes a bad decision is all you can get. Hopefully it will get more meaningful discussion going at least.

Speaking of which, I appreciate your point of view and your demeanor. Civil discourse seems pretty rare these days.

BraveSirZaphod ,
@BraveSirZaphod@kbin.social avatar

Same here! It's not often you get a online discussion about economics or housing policy that's civil and productive.

Turkey_Titty_city ,

The landlords have much bigger pitchforks. Called the police, and the city government.

and they will fight any and every expansion of the housing market in order to protect their power and further increase housing values.

emeralddawn45 ,

What downsides? You come out talking about unintended consequences but give no examples.

bluGill ,

Look at all the different responses to this post. I've given many different answers to different proposals.

nomadjoanne ,

I think it should just be illegal to not rent out real estate.

Fox ,

How many days is a homeowner allowed to be away from home? How does a government keep track of this without violating people’s right to privacy?

Trudge , (edited )
@Trudge@lemmygrad.ml avatar

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.

Honytawk ,

The government knows where you live. It is on your ID.

You can only have one address on your ID. So they know where you don’t live.

Fox ,

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.

Torvum ,

“You shouldn’t be allowed to own something and use it for any purpose that you want, just because you bought and own it”

The fuck.

LazyCanadian ,

Can’t drive a car without a license, rules around usage of things you own are pretty standard.

Torvum ,

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.

GreyEyedGhost ,

There are also rules for where, when, and how long you can have your car sit somewhere, including your own yard in some places.

Honytawk ,

So lets turn it into the extreme.

Say you are so rich, you buy every house on the planet. Which you will use as your summer/autumn/winter/spring stay locations.

Would that still not harm on another’s life?

MarsMa ,

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.

Torvum ,

[Thread, post or comment was deleted by the moderator]

    •
    Pyr_Pressure ,

    Should someone be allowed to buy all the freshwater lakes around a major city and then not sell the water for people to drink?

    Ew0 ,
    @Ew0@lemmy.sdf.org avatar

    Nestle vibes

    Torvum ,

    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.

    Aux ,

    Sounds like a typical Nazi…

    nomadjoanne ,

    Did you know that Hitler also drank water???

    Onfire ,

    Why not? I own a house and I want to keep it to myself. I don’t want to deal with problematic tenants.

    Zink ,

    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.

    taco_ballerina ,

    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.

    blueskycorporation ,

    Once the property is fully depreciated, the trick is to do a 1031 exchange to buy a new one, and then you can depreciate the new one.

    captcha ,

    Sound like basic Henry Georgism.

    keepcarrot ,

    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.

    SootyChimney , (edited )

    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.

    keepcarrot ,

    Yes

    Zink ,

    Haha, in the US it’s more like $25 million for a couple. Though I see that in 2026 it’s slated to drop to only $14 million per couple.

    BraveSirZaphod ,
    @BraveSirZaphod@kbin.social avatar

    The amount of vacant units in cities where people actually want to live tends to be highly exaggerated (Manhattan is generally sitting somewhere around a 5% vacancy rate), but twisting income tax into some weird kind of tax on unrealized value is administratively messy and completely unnecessary when we already have much simpler solutions in the forms of land value taxes or even basic property taxes. Not to mention, increasing taxes on rental units just increases everyone's rent, which is a rather odd strategy if the aim is to make housing more affordable.

    People really will propose literally anything except the wild concept of building more housing.

    Nurse_Robot ,

    Housing is constantly being built, then immediately purchased by corporations at ridiculous prices. This artificially raises values in the housing market, which is paid by people who rent these homes, because they don’t have an affordable home to buy. Sadly, it’s not as easy as just building more.

    Olgratin_Magmatoe ,

    Things like that is exactly why there needs to be a limit on how many buildings/houses an owner can own.

    bigschnitz ,

    …increasing taxes on rental units just increases everyone’s rent…

    Can you explain this to me? Surely a landlord charges the highest rent that the market can provide. Why would taxing the landlord increase the Tennant’s ability or willingness to pay a higher rent?

    BraveSirZaphod ,
    @BraveSirZaphod@kbin.social avatar

    A policy like this would apply to the entire market. All landlords have vacancies at least occasionally, due to renovations or bad luck.

    It won't affect a tenant's ability to pay more, but a policy that increases ownership costs across the board means that there won't be cheaper alternatives in the competition, so the tenant will need to either find a way to pay the increase or they'll have to leave to a cheaper market. The highest rent the market can bear will go up if it's not possible to compete any further on lower prices.

    bigschnitz ,

    A policy like this would apply to the entire market. All landlords have vacancies at least occasionally, due to renovations or bad luck.

    Wouldn’t it only apply to the local market? A lot of people, particularly higher earning white collar workers have the ability to demand a work from home policy. Could they not move further away to cooler markets if their commute is eliminated or reduced to only a few days per week? Surely that would put downwards pressure on the inflated local market, moreso if a progressive tax system is implemented (eg tax rates increase % after value increases by a certain threshold).

    It won’t affect a tenant’s ability to pay more, but a policy that increases ownership costs across the board means that there won’t be cheaper alternatives in the competition, so the tenant will need to either find a way to pay the increase or they’ll have to leave to a cheaper market. The highest rent the market can bear will go up if it’s not possible to compete any further on lower prices.

    Unless I’m grossly misunderstanding how land tax works, it won’t evenly apply across the board (even a flat % tax would be a higher burden for more expensive properties). This would drive people towards constructing cheaper housing as the bottom falls out of the top end of the market, which in turn would make housing cheaper for owner occupiers in those cheaper markets. Isn’t that the desired outcome?

    vector_zero ,

    It’s similar to credit card companies sharing merchants extra fees. They pass those fees down to the customers.

    bigschnitz ,

    Credit card companies spend a considerable amount of time and money trying to work out how high they can optimize these merchant fee rates. A credit card charge is painstakingly optimized to maximize profits. Often credit card companies pay a portion of these fees because the competitive market will not shoulder the burden - customers will move to a cheaper credit card, which is why cards with high fees often try to entice customers with rewards programs).

    Without the ability to influence demand, the seller can either eat the cost or remove themselves from the market, my question is how does increasing the tax move the needle on demand knowing that any rational acting landlord is already acting to maximize their return on investment? Are you suggesting that they’ll copy credit cards and increase rates but offer some bonus program to increase demand? I’m not convinced that would work.

    PZK ,

    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.

    moujikman ,

    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.

    Awoo ,

    Landlords should not

    Not a response to the post. Just making a statement about landlords.

    uralsolo ,

    Sure would be cool if the logic of eminent domain would be applied to housing that sits vacant for ages. If they’re not using it just take it.

    JamesConeZone ,
    @JamesConeZone@hexbear.net avatar

    free-real-estate

    alcoholicorn ,

    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.

    Flinch ,
    @Flinch@hexbear.net avatar

    mao-wave I have an idea

    Incubus ,

    Just add land value tax

    Olgratin_Magmatoe ,

    Georgism is the way

    DessertStorms ,
    @DessertStorms@kbin.social avatar

    So close, and yet so far, why so desperate to cling on to capitalism??

    Olgratin_Magmatoe , (edited )

    Georgism is not a form of capitalism. Georgism is a strategy for government revenue. Regardless of what type of economy you have, unless you have pure anarchy there needs to be a source of income for the government. Georgism is the least bad option, they’re all bad.

    I usually fall somewhere in the range of what people call socialism. I’m certainly not a capitalist.

    sugar_in_your_tea ,

    My main concern is Friedrich Hayek’s concern that valuations wouldn’t be fair. Where there’s an opportunity to game the system, those with means will. But maybe it’s better than our current system.

    I would like to see working examples first, if possible.

    Olgratin_Magmatoe ,

    Where there’s an opportunity to game the system, those with means will.

    Absolutely. It’s one of my few gripes with georgism. And at the end of the day a shitty implementation of georgism is better than our current shit show of billionaires and mega corps paying $0 or next to $0 in taxes. Sometimes they even get paid instead.

    But anyways, I haven’t seen much detail about how to fairly valuate land, but I’ve had some thoughts on it. The number one thing should be that all land is taxed at the same percentage, but each plot is valued differently. I think one of the ways to do this would be to simply calculate how far a given plot is from the nearest city center, and factor in how big the population of that city is.

    It’s something that can be objectively measured, should be roughly correlated with what we could subjectively agree on is valuable, and isn’t something that could be gamed easily.

    I would like to see working examples first, if possible.

    The Netherlands has a land value tax, though it is not the sole income source for their government.

    iamexpat.nl/…/how-does-it-work-taxation-real-esta…

    government.nl/…/how-can-i-check-the-woz-value-is-…

    My understanding is that the government employs people to assign a value to each plot, and from there the use case of the land is considered. Land owners can then appeal the judgement if they like. I know there are some other countries besides the Netherlands that have a LVT system, but the Netherlands is the first that comes to mind. I’d honestly be ok with either of these systems of determining land value, either the one I made up or the Netherland’s. At the end of the day it’s pretty much the only way to tax the rich without them just moving their money elsewhere. You can’t move land after all, and much of their wealth is tied up in land.

    Here is a research paper into the effects that might interest you.

    www.elibrary.imf.org/view/…/article-A001-en.xml

    sugar_in_your_tea ,

    Thanks, I’ll check it out.

    I generally think the Netherlands makes sensible decisions (e.g. routing traffic around Amsterdam instead of through it, investing in rail and cycling infrastructure, not having a tipping culture for restaurants, etc), so it’s expected that they would have a decent solution here too.

    I wish the US would take a page from their book and focus on moving people instead of cars, because pretty much everything else follows from that.

    Olgratin_Magmatoe ,

    I’m right there with you. I feel like I’m talking with aliens when I say stuff like this to other americans.

    sugar_in_your_tea ,

    Yeah, it just makes perfect sense in an urban environment. If they want the “traditional” American car-centric lifestyle, then they can live further from city centers and commute in.

    Olgratin_Magmatoe ,

    I’m lucky enough to live in a place that is a little bit walkable (7 eleven, pizza shop, beer store 2 min walking with a grocer 15 walk), there is so much more that could be done. I wish I didn’t have to get a car, and I am so close to basically ditching mine for an e-bike. The only thing stopping me is that my city’s bike safety is not the best.

    sugar_in_your_tea ,

    Mine is pretty close as well, but I need a better way to get to work to ditch one of my cars (will always keep the other for family trips). My preferred option is extending the light rail system along tracks that already go near my house and are largely unused (only used periodically so stash unused cars/engines). Without that, my commute is ~2 hours by transit, and it would be about half if the line existed. Driving is a little over 30 min by car, for reference.

    I could switch jobs and then cycle to work, and there are a lot of opportunities along a really nice bike path, I would just need to actually switch jobs.

    And I live in the middle of suburbia, I’m sure other people need much less. Yet my area doesn’t prioritize transit, and instead we keep widening highways, which isn’t a long-term solution.

    usernamesaredifficul ,

    landlords should be forced to pay a house tax on every house they don’t live in to the value of one house

    barrbaric ,

    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.

    JAC ,

    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.

    usernamesaredifficul ,

    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.

    Job4130 ,

    No. Landlords should be able to do with their property what they want.

    recently_coco ,
    @recently_coco@kbin.social avatar

    No seconds until everyone has a plate. We all learned it as kids. Now let's do that with housing.

    Fuck their capital. They don't deserve it. Take the empty houses and give them outright to those that need them. There are more empty homes in the US than unhoused people.

    BraveSirZaphod ,
    @BraveSirZaphod@kbin.social avatar

    Those empty houses are largely in places where people do not want to live. If you look at markets where people actually live, it's a pretty different picture. A shack in the middle of the field in Nebraska does not help a homeless man in Manhattan (and he almost certainly wouldn't take it if you offered it for free).

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