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.

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.

    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.

    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.

    bigschnitz ,

    So a less efficient and more complicated land tax? Is there any benefit to this compared to just taxing based on the value?

    GreyEyedGhost ,

    The idea is to make it financially uncomfortable to retain real estate in a manner that harms society.

    Pipoca ,

    That’s literally what a land value tax does.

    GreyEyedGhost ,

    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.

    Pipoca ,

    Land value taxes are quite rare in the US.

    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.

    Zuberi ,
    @Zuberi@lemmy.dbzer0.com avatar

    This article title makes ZERO sense. Empty house tax, sure.

    But an “income” tax on no rent being paid?

    Why would that EVER be passed by the people who own all of the houses? Don’t waste the poors’ time lol

    WhiteTiger ,

    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…

    peasntanks ,

    “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.

    www.hrblock.com/…/what-is-imputed-income/

    Zuberi ,
    @Zuberi@lemmy.dbzer0.com avatar

    That’s just not solid logic

    Honytawk ,

    They can extrapolate the supposed income by looking at how much they asked previous renters.

    Zuberi ,
    @Zuberi@lemmy.dbzer0.com avatar

    How is that an “income” tax? Make it make sense.

    ThereRisesARedStar ,

    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.

    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.

    Javi_in_4k ,

    Fyi, what you want to say is that we should have a wealth tax. I agree with you on that. We should also tax stock holdings similarly.

    Professorozone , (edited )

    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.

    msage ,

    Why do we put retirement funds into stocks?

    Because we convinced everyone that’s the only place where your money can grow?

    So that every time Wall Street can and will again hold everyone hostage?

    We should rethink this whole approach.

    Professorozone ,

    Perhaps, but unless it’s a bond fund or something, most of the options are funds that hold stocks. It’s the way it is.

    Also, ironically, buying a property to rent is trying to “rethink the whole thing.” So naturally, it should be taxed even if it’s not making money.

    If also like to point out that the article linked did not mention taxing the landlord. I guess that was the poster.

    KevonLooney ,

    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.

    Professorozone ,

    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.

    KevonLooney ,

    “eliminating tax loopholes”

    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.

    wizardbeard ,
    @wizardbeard@lemmy.dbzer0.com avatar

    I’m not insulting you, I’m just saying that you are trying to sound smart while not contributing anything.

    Is this a real sentence, typed seriously, with no irony? What a world.

    Spacebar ,
    @Spacebar@lemmy.world avatar

    A penalty for units that have been vacant longer than 6 months makes sense.

    Units need to be rehabbed, but keeping a property uninhabited for long periods of time should have a disincentive tax applied to them.

    Astroturfed , (edited )

    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.

    Blaze OP ,
    @Blaze@discuss.tchncs.de avatar

    Isn’t real estate affordability an important part of personal finances?

    Astroturfed ,

    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.

    Blaze OP ,
    @Blaze@discuss.tchncs.de avatar

    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!

    JshKlsn ,
    @JshKlsn@lemmy.ml avatar

    Literally no one can afford houses these days. This only affects rich and privileged people.

    Torvum ,

    There are plenty of houses for sale in the 50-70k range in smaller towns that orbit large cities but sure, “literally no one”

    wizardbeard , (edited )
    @wizardbeard@lemmy.dbzer0.com avatar

    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.

    Aux ,

    This is literally not true.

    Ryumast3r ,

    There are houses that sell for the same price as a car ($20‐50,000) in Pittsburgh, so your absolutist statement is dead wrong.

    Aux ,

    Yeah, this post should be removed.

    bytor9 ,

    I’m glad to find this comment here. I was about to unsubscribe because I’m here for personal finance; not tax policy debate or politics.

    Now if a policy like that did come out and the article helped to navigate or take advantage of it as an individual, then I would be interested.

    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.

    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.

    JasSmith ,

    This is just tinkering around the edges. We need land value taxes. This is a guaranteed way to solve these massive housing crises occurring in so many Western nations. LVT ensures expensive land is utilised better. Either by highly productive businesses, or higher density dwellings. Either way, society makes more efficient use of the land, and prices are constrained. It's an excellent way to ensure land banking is disincentivised, and that rentals don't stay vacant. Even Adam Smith was in favour of an LVT. Economists are almost unanimous on its efficacy. The only reason we don't widely deploy them is because it will hurt house prices and voters don't like that.

    uniqueid198x ,

    landlords don’t like it either. At least in NY, the lanlore lobby is incredibly strong.

    Olgratin_Magmatoe ,

    A LVT/georgism system would instantly kill the profit margins of all landlords around the country, so they will do everything in their power to prevent it from happening. All the more reason to do it.

    BRINGit34 ,
    @BRINGit34@lemmygrad.ml avatar

    youtu.be/uT5tQV3aPik?si=LKDI44ZDOvcMPYJp

    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?

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