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If you own a house with nobody living in it, you gotta pay rent to the state each month for the privilege of keeping it empty.
They do this in India. You're allowed 2 homes, 3rd onwards you have to pay Income tax for deemed rent received if it's empty.
After a while, it's just part of the cost.
Not much of an expense imo. Like giving a speeding ticket to a billionaire, it doesn't actually mean much if you're rich enough.
Id rather make the initial purchase cost extraordinarily expensive after buying more than two houses. Third house is 5x the cost. Fourth house is 50x the cost. Nobody needs four houses so it's a fuck you tax.
And at scale it will eat into investor returns, making holding them empty a less profitable endeavor. They would suddenly go from having a neutral MRR asset turned into a negative MRR if they choose not to rent out. You can bet your sweet bippy that the bean counters are going to notice the difference and argue to sell or rent them to cut the expenses.
It's not just another cost of doing business though, it's specifically a cost of not doing business.
So imagine someone has been buying up homes to rent them. Market rate for rent is $1000 and they own 1000 units (just to make the math easy). That means they would profit $1 million every month with every unit filled, and lose $1 million every month for leaving every unit empty.
Now imagine they have half the units filled, so they are getting $0 each month. They could try and raise the rent over market rate to cover the cost, but that would make it harder to fill the empty units and encourage their tenants to leave. If they lower the rent a bit though, they could fill the empty units and erase the cost entirely. Now imagine every landlord is in this dilemma; it puts the pressure onto them to appeal to prospective tenants. They could even increase profit by housing people for free, just filling units with the homeless to reduce costs.
If they don't change behavior and just eat the cost, then that's more money for the state to invest in housing programs.
You do, it's called property taxes.
But they mean specifically a vacancy tax. So anyone who owned vacant property would have a large additional payment or get it rented
I don't see this working. Not only the property owners would transfer this cost to your monthly payments, the government would need an enormous bureaucracy to actually control and enforce this law. I don't believe this is technically possible to achieve.
They pass on a tax that doesn’t apply if you’re renting it?
Eventually somebody will rent it, and the monthly price will be higher to recoup the tax.
No, like market rate for the property. Everyone pays property tax, regardless of whether the property is vacant or occupied.
My dad inherited my grandma's ancient house recently and is practically forced to find a way to remodel it to be rentable because there is a imputed rental value tax where I'm from.
What's the alternative, just leave it empty?
I would think it could also be acceptable to transfer ownership to a relative who doesn't already own a home. It just seems like a waste to have a house with nobody living in it while so many people are unhoused.
I guess he could sell it but then its pretty likely that it's brought by a property developer, as we can't afford to buy it off him. As it stands, the house isn't really suitable to live in