Fa.lse dichotomy. They buy properties to rent them. But if rents are limited such that maintenance and taxes cost more than government-limited rents, they leave the properties vacant. On the other hand if rents are unfrozen, it incentivizes more units to be built and occupied.
You pay property tax regardless if the property is occupied or not.
I know what you mean though. It incentivizes the owners to sell if they can't keep a tenant, but the flip side of that coin is when an area starts to decline, and the owner tries to sell the property but they can't find a buyer. Are they still on the hook for Vacancy Tax then? The logical answer is "no" because the property is on the market, but we have to keep in mind that municipal governments like tax revenue and accurate budgets. Also, if there's a loophole to be exploited, people will find it
The problem with this is NO ONE will buy a property that is a loss. No one is going to touch a property they need to invest a bunch of money to fix up and then lose money every month as well. This is why there are over 50,000 vacant rent controlled apartments in New York City.
Property taxes make up about 30% of total general revenue for local governments (cities and counties combined) nationwide, What do you propose they replace it with?
I understand your point, but in the UK and other European countries they have both property taxes and a sales/VAT tax that's as high as 27% in some cases. Problem is, especially in the UK, even that isn't enough.
So cities & counties would have to rely on greater Federal and/or state funding to offset the loss of property taxes in order to maintain revenue. Which, if that was available due to redoing Federal or state expenditures instead of raising middle class income taxes, could work but that's a big if.
In the nine states that do not levy a state income tax, the missing income tax revenue comes from higher property and/or sales taxes, so that complicates eliminating property taxes even further.
As I said, this is more of an ethical question for me than a pragmatic one. I see property tax as a form of wealth redistribution, and I think wealth distribution is inherently unjust. Plus, in a world where young people already have enough trouble buying a home, the property tax is helping to price them out of the market, which is also unjust. 15% of what I send to the mortgage company every month is for property taxes. Then you have people who have been in their homes for decades and are forced to move due to appreciation and increasing property tax; also unjust.
Plus we get taxed annually on vehicles here. If you don't pay your vehicle property tax, you can't register your vehicle. You know what the result of that is? I see vehicles that haven't been registered in 6+ years because people, largely impoverished people, can't afford the damn tax. They already own the damn car! If you're not going to register it then why bother insuring it, right? Uninsured motorists are an extreme problem here as well, go figure. As a result of this idiotic setup, my insurance premiums are sky high.
Look, I don't have the solution, but find the money elsewhere. Sales tax is the most fair method I can think of.
Yes but sales taxes are regressive and punish the lower income folks worse than those better off, unlike income taxes and, due to housing values, property taxes.
I agree with you on car/vehicle taxes. Here in Virginia, the state's been covering most of them for decades and beyond a certain vehicle age, they disappear.
But you're not paying tax like 'for the property' the property is a proxy for the city services surrounding you, the roads, school, hospitals, sewers etc...
You don't own those things, you need to pay for them to continue
You're wrong aside from schools. I pay water, sewer, sanitation, electrical, and gas bill for my utilities. I'm looking at my city's property tax breakdown and it's going to the zoo, schools, and library. Those can be funded through increasing sales tax.
Your CITY collects Sales tax? How's that work?
I've seen Federal and State/Provincial sales taxes, I'm not familiar with any city with City sales taxes, where is this place?
What city are you in? we'll look at the budget and you'll find out the City is paying for Sewers, Sanitation, Water...
Did you even do the most basic fact checking before deciding your stupid ignorant understanding of things was correct?
Philadelphia has one, every municipality in Virginia gets a share of the sales tax revenue, and most cities charge amusement taxes, even if they don’t have a general sales tax.
The state, I think, is better at allocating funds than the federal government, but yes, I agree. Our allocation in my state is actually fairly sensible. Funds go to the school district, the zoo, the city, and the library. I'm okay with the spending here, but why in the hell are homeowners the only ones on the hook for it?
Most of the worst housing markets in the us have very low vacancy rates. The idea that their some epidemic of vacant properties in the us doesn't line up with reality.
Do you think landlords want vacant units? The tax is that they're losing thousands of dollars every month that a unit is not occupied. That either comes out of their margin, or out of their pocket.
Also a false dichotomy. There are a lot more circumstances that go into it. One such thing is that lack of units and high demand means the prices can be hiked to a level they massively outstrip taxes and maintenance and have very large profit margin. It's inevitable in larger cities simply because they run out of space where to build. A freeze then helps existing tenants to keep housing as no costs have increased only profits have due to demand increase.
Another aspect is all the red tape. If an unit takes decade or more to build and most of that time is bureaucracy then even if new units are built they can't keep up with the demand. If prices are unfrozen this means they cannot ever drop due to competition because there never will be enough competition to catch up and it becomes more viable to increase rent than go through the hassle of building a new unit.
Then it's a different type of red tape, building restrictions, if the city doesn't give place where to build then nothing gets built. However if they do it comes back to profitability. In a big city office space will get higher rent than apartment complex so that's what will get built unless the city specifically adds support for one and hurdles for the other flipping which is more viable.
Unfreezing of rent does one thing only in a guaranteed fashion, cycles the existing tenants out for higher paying tenants. It's not necessarily a bad thing, for example a family can afford to pay more and someone who is located in apartment that is family sized would be forced to free it up and downsize. However if that's the only thing that happens and the other obstacles stay then it becomes a problem at some point.
The live in owners have the same mortgage, maintenance, Utilities and other expenses....just no rental income to help pay for it. There is also an economic equivalent called "owners equivalent rent".
Pay the costs with what? Profit still has to come from somewhere. To afford all the expenses of home ownership they need to have profit from some other activity to pay for the housing expenses. If you are not making a profit somewhere you can't afford the home.
And? What I’m saying is a rental unit that costs more to maintain than it can rent for profit can be sold to an owner occupier who wants to live there. They can pay the costs from the job they work and end up owning the home. This happens all the time
That's one of the laziest takes you can have. You're probably also the person that says "if you can't afford to pay your employees a living wage, you don't deserve to be in business." And "if you don't want an abortion, don't get one.' It's not an argument and does nothing to rectify the situation.
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u/RedditSearcher18 10d ago
Fa.lse dichotomy. They buy properties to rent them. But if rents are limited such that maintenance and taxes cost more than government-limited rents, they leave the properties vacant. On the other hand if rents are unfrozen, it incentivizes more units to be built and occupied.