> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.
I've believed for a long time that heavily taxing income from second+ properties, similar to capital gains, would help reduce rent-seeker hoarding, to help free up and reduce the cost of properties for primary-residence owners.
We tried subsidizing individual housing and caused the 2008 recession. It's better to let the homes be owned by those who will pay up whether their renter does or does not. A landlord provides a valuable insurance service in some ways.
How is this not a defacto transfer of wealth from renters to owners? Rental supply will go down due to reduced profits, and therefore ultimately rental prices as a whole will go up once a new equilibrium with fewer rentals is reached.
These sorts of suggestions generally seem hugely biased towards buyers at the expense of everyone else.
I don't follow. If you make holding an investment property more expensive than owning, than fewer people will own investment properties, reducing supply and increasing rental prices.
Yes, the investor makes less, but the expected result is less supply so rents are higher, not the same supply but with strictly lower rents.
It's not about vacation homes. It's about rentals in generic suburb #5, primarily, but it's also the case that an increasing number of rental properties are being left vacant thanks to "algorithmic collusion" being used to drive up rents:
Thing is, rental buyers really only make out well because they can rent places for more than their purchase/mortgage equivalent. If supply were large enough, I'd think rental rates below the average monthly mortgage payment would be more widespread and tend to make rental property ownership less appealing.
Yes, any government that was serious about addressing this issue would take measures to decrease the incentives for property investment. Instead in most of the countries I mentioned property investment enjoys benefits that other forms of investment don't (tax, leverage, etc).
Personally, I think LVT would be the best approach.
