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?
Don't forget about real estate taxes in lieu of an income tax when empty. They are due whether a place is rented or not.
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.
Denmark applies a property tax to foreign properties at ones disposal. If it's rented, it's waived and tax is levied on the rental income. If it's unoccupied, it's considered a luxury available for your use and thus is taxable property, even though it's in a foreign jurisdiction.
Multiple holder companies incoming. Now that will need to be plugged up.
Not saying this is a bad idea. But they will find loopholes.
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.
In this case landlords could just pay some money to fake tenants to make their rentals appear occupied (at a ridiculously low price). Rental prices could even rise because of free rentals number reduction and necessity to cover additional expenses.
This article title makes ZERO sense. Empty house tax, sure.
But an "income" tax on no rent being paid?
Why would that EVER be passed by the people who own all of the houses? Don't waste the poors' time lol
Yep, a 100% income tax rate on zero income is zero. It seems a lot of reddit's financial incompetence is spilling over to lemmy. Also, property taxes exist and are being paid already...
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.
Ummm, a lot of people that are NOT rich, own stocks. Like nearly every 401k. If those stocks go up, then there is a tax, it's called capital gains and goes up for higher income earners.
Also, where I live there is a tax paid on vacant rental property. It's called property tax. I do not believe people, rich or poor, should be taxed on money they are NOT making. This would hurt owners with a legitimate reason to have a property vacant, like renovations, repairs, or a soft market. So in addition to rent loss the owner would have to pay taxes because the assumption is that the owner is enjoying it?
I don't think there should be a wealth tax. I think the wealthy should just actually pay some taxes.
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.
If buying a house isn't right for you - and for many renting should be the better option - then you will be forced to pay a lot more so the landlord can recover not only the cost of the building, but also that much higher taxes. In effect you are pushing people who really shouldn't buy a house to buy one anyway.
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.
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.
I don't think people care about the downsides for landlords anymore. Real or imagined, perceived greed is what people blame for high rent costs. They're ready to make greedy landlords suffer as they have and I can't say I blame them one bit.
What downsides? You come out talking about unintended consequences but give no examples.
So a less efficient and more complicated land tax? Is there any benefit to this compared to just taxing based on the value?
That's what property tax is for.
Raise the property tax, exemption for owner occupied, then tax the rest.
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.
landlords ought not exist
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.
Many landlords don’t even pay taxes on the money they DO make.
They can depreciate a property to offset their income, even though the property is going up in value. The catch is that they have to pay taxes on more of the money they get from selling the property. But if they don’t sell, potentially no taxes for decades. And if they leave it to their kids in their will, no taxes there either and the kid’s cost basis in the property is the market value at the time they received it. So they can start the depreciation all over again.
This is how my non-expert self understands it anyway. It’s part of what draws some people into real estate.
They don’t? They do where I live. Property tax is real in Michigan.
Landlord should always have a few not rented places so that when someone is ready to move there is a place they can go. They also should be doing major remodels and upgrades approximately every 30 years which means a long stretch of not occupied.
By major remodels and upgrades I assume you mean slapping a coat of white paint to cover the cracks and mold, right?
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