Personal Finance

Landlords do have to pay an income tax on property regardless of whether it is occupied or not, it is just that when a property is not being rented, it generates 0 income and 30% of $0 is $0.

Do you mean some sort of land appreciation tax?

Income tax can only tax income.

As others have said - land value / property tax is supposed to take care of this. You could also add a specific vacancy tax.

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.

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.

Landlords should pay 100% tax on their empty rentals.

You'll see how fast they will accept any and all new tenants, at a much lower price.

Which would also flood the market with housing, lowering the prices even more until renting becomes an actual beneficial option compared to buying and paying off a loan.

Real estate would also not be seen as an investment anymore.

I don't know about this, but the non occupant owners should have to pay obscene property taxes and then reduce the rates for owner-occupants to a reasonable level.

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.

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

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.

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.

That's what property tax is for.

landlords ought not exist

In Denmark most apartments have “residence requirement” - if you own a unit and keep it empty the city will fill it with someone waiting for public housing.

Ahem.

Landlords should have their rental properties seized and placed under the ownership of the local government. Berlin did it. You want to bring housing prices back into reach of the middle class? Stop letting people hoard houses.

Just add land value tax

They don’t? They do where I live. Property tax is real in Michigan.

Although I love the gothamiat. I think they should pay taxes. But what does this have to do with personal finance?

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.