this post was submitted on 29 Jan 2024
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49
Create a race to the bottom in the rental market (lemmy.world)
submitted 11 months ago by [email protected] to c/[email protected]
18 comments fedilink hide all child comments
 

Not sure if this counts as politics or not; let me know.

One major brick in the toilet tank of the rental market is apparently investors just 'parking their money' in properties and leaving them vacant longterm, with an eye to selling them later at an inflated price - with rental income being not worth the hassle.

Some people have suggested a tax on vacant properties to give more incentive to rent them out.

Good idea, but I say we go one better.

  1. Put a hefty tax on all properties that aren't owner-occupied.
  2. Give a rebate for renting them out, proportional to the percentage above or below the average rental for comparable properties.

If you charge above-average rent, you get a small rebate.

If you charge average rent, you get a medium rebate.

If you charge below-average rent, you get a large rebate. This could even exceed 100%, using the funding from the other categories.

People chasing the large rebate will drive the average down over time, ate viola, we have a race to the bottom and the consumers reap the benefits.

There's probably a dozen reasons why this wouldn't work, but I like it anyway.

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[–] [email protected] 3 points 11 months ago (2 children)

I can’t agree with a rebate for charging above average. Why should our tax money go towards giving them more money for ripping us off.

I’d possibly tolerate a rebate for below average, but I wouldn’t support it.

[–] [email protected] 5 points 11 months ago (1 children)

So, a common suggestion I've seen (and even made) in the past is to put a levy on un-occupied homes. But one problem with this is enforcement: how do you tell it's unoccupied?

Well, OP here has the solution. Flip the burden of proof around. Charge everyone, but if you can demonstrate that you have a tenant, you get that charge waived.

Then, OP adds further nuance to it. Instead of being a binary "rented/unoccupied", there are tiers. Start with unoccupied at maximum tax. Down to minimum (potentially zero or even negative tax) for below-market rent. It's just all described in terms of starting with an automatic levy of a certain amount, with rebates on that levy to get you to the desired rate.

[–] [email protected] 2 points 11 months ago

Hm. And if you link the basic levy to the cash rate...

[–] [email protected] 4 points 11 months ago* (last edited 11 months ago)

Because renting it out for a lot is better than tying up the market; at least it'll soak up some rich idiot.

Also it's not our money - it's coming off the new tax.