3 ms·

Easy fix- have very high property taxes, but they are deductible or waived for locally earned income. If it costs the owner 25% a year to hold the property, won

Easy fix- have very high property taxes, but they are deductible or waived for locally earned income. If it costs the owner 25% a year to hold the property, won't be nearly as attractive. Unfortunately at this point a large amount of the Canadian and Australian real estate markets (and thus national wealth) are driven by Chinese money, so there's little chance of this happening.

mrfusion 6y ago
Good except for retired folks with less income or investment income. Perhaps just make a homestead exemption.
- cortesoft 6y ago
  We kind of have that... property taxes are deductible from your federal taxes if the home is your primary residence... although they put a cap on the amount a few years ago, and it isn't nearly as valuable anymore.
- ska 6y ago
  You can make a homestead exemption. You can also make property taxes lien-able on sale or transfer of the home, which makes some sense in areas where property values are rising quickly. If you are fixed or low income and care more about having a place to live than making money on the property, that works too.
conanbatt 6y ago
You have a seemingly unlimited demand for a good at any price . Produce as much as possible and sell as much as possible is a more sensible approach. Each house sold to a chinese person makes canada as a whole one house-worth richer.
- foolmeonce 6y ago
  Yeah though when it collapses, i.e. due to foreign policy, local government will likely end up with the costs tearing down abandoned houses and a drop in real estate tax even on everything, I believe they call that phenomenon "Detroit". Attempting to keep a buffer for that away from the various interest groups is impossible even if you defy the physics of money in politics to adequately tax profits that can buy politicians.
  - conanbatt 6y ago
    > Yeah though when it collapses, i.e. due to foreign policy, local government will likely end up with the costs tearing down abandoned houses and a drop in real estate tax even on everything, I believe they call that phenomenon "Detroit". That's an idea of what could happen, but it is not what is happening. Of course it would be better if the properties bought by foreigners were rented out, and the incentives to do so are very strong already (making rent money!), but even if they aren't, the worst case scenario is an eventual reposession of the property meaning again that Canada is one house-worth richer!
- jbay808 6y ago
  So just pave over Canada's best farmland (the fraser river delta) with unoccupied houses built for "export", and don't worry about providing them with transportation networks, schools, etc under the assumption that nobody will actually live there?
  - rubatuga 6y ago
    This is hilarious, like maybe make them so that they don't have interiors, just a shell of a house!
  - conanbatt 6y ago
    Whatever works, why not. Why would canadians as a whole refuse to get richer so easily?
epistasis 6y ago
I would agree, with one caveat: limit taxes to land only. And then set the taxes so high that the purchase price of land is as close to $0 as possible, which means that there will be both small positive and small negative valuations for the land (because of the tax burden). This is equivalent to taxing away the land rents: the unearned appreciation of value in property that comes from those around you, rather than what you build. In this sort of system, other taxes can decrease quite a bit as well.
- jbay808 6y ago
  Basically this means that all land is effectively rented from the government. It's an interesting proposal, but how would price discovery occur?
  - epistasis 6y ago
    There are still sale prices, the difficulty is separating the land portion from the improvements portion. This is currently performed for many purposes, including insurance, which has the benefit of being tied to somebody's valuation, rather than a standard assessors estimate. However, this idea originated from a time before we had zoning restrictions like we do today. Which also means that any change in zoning would result in a big change in land value too. One could also imagine transferring zoning allowances, much like air rights are sold in NYC, so that people that don't want to change their property can instead give their greater density allowance to person down the street that wants to change their duplex into a fourplex, or something. Such transfers would also be near to zero dollar activities. But given our current difficulty with handing out any sort of zoning change to allow more people to live in high demand areas, I start to think that this idea is hopelessly poisonous to land politics of entrenched powers (land owners). Still, one can dream.
    - srtjstjsj 6y ago
      Sale prices are part of a feedback loop with taxes.
- joeseppy 6y ago
cpascal 6y ago
I like the idea of a vacancy tax that is proportional to the value of the property so that any year-over-year gains in equity are eaten up by such tax. I think turning a vacant property into a liability instead of an asset would do a lot to keep housing accessible.
- webmobdev 6y ago
  The Tamil Nadu state government (and a few other states), in India, did something like that - when the real estate market fell a bit, the government noticed that the developers were still holding on to many ready-to-occupy flats (condos) in the hopes of getting a higher price later. The government immediately issued a notice that once a residence is constructed by such developers and is ready-to-occupy, property tax and utility bills (for water) has to be paid for it whether it is occupied or not. Thus builders stopped building in excess or holding on to it to cut supply and artifically raise demand (and thus prices).
throw0101a 6y ago
BC has vacancy tax: * https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy... If there is no registered resident for a domicile then the owner gets charged. Not sure how useful it's been: * https://www.cbc.ca/news/canada/toronto/vacancy-tax-delayed-2021-1.5451985 https://www.cbc.ca/news/canada/toronto/vacancy-tax-delayed-2...

mrfusion 6y ago

Good except for retired folks with less income or investment income. Perhaps just make a homestead exemption.

cortesoft 6y ago
We kind of have that... property taxes are deductible from your federal taxes if the home is your primary residence... although they put a cap on the amount a few years ago, and it isn't nearly as valuable anymore.
ska 6y ago
You can make a homestead exemption. You can also make property taxes lien-able on sale or transfer of the home, which makes some sense in areas where property values are rising quickly. If you are fixed or low income and care more about having a place to live than making money on the property, that works too.

conanbatt 6y ago

You have a seemingly unlimited demand for a good at any price . Produce as much as possible and sell as much as possible is a more sensible approach. Each house sold to a chinese person makes canada as a whole one house-worth richer.

foolmeonce 6y ago
Yeah though when it collapses, i.e. due to foreign policy, local government will likely end up with the costs tearing down abandoned houses and a drop in real estate tax even on everything, I believe they call that phenomenon "Detroit". Attempting to keep a buffer for that away from the various interest groups is impossible even if you defy the physics of money in politics to adequately tax profits that can buy politicians.
- conanbatt 6y ago
  > Yeah though when it collapses, i.e. due to foreign policy, local government will likely end up with the costs tearing down abandoned houses and a drop in real estate tax even on everything, I believe they call that phenomenon "Detroit". That's an idea of what could happen, but it is not what is happening. Of course it would be better if the properties bought by foreigners were rented out, and the incentives to do so are very strong already (making rent money!), but even if they aren't, the worst case scenario is an eventual reposession of the property meaning again that Canada is one house-worth richer!
jbay808 6y ago
So just pave over Canada's best farmland (the fraser river delta) with unoccupied houses built for "export", and don't worry about providing them with transportation networks, schools, etc under the assumption that nobody will actually live there?
- rubatuga 6y ago
  This is hilarious, like maybe make them so that they don't have interiors, just a shell of a house!
- conanbatt 6y ago
  Whatever works, why not. Why would canadians as a whole refuse to get richer so easily?

epistasis 6y ago

I would agree, with one caveat: limit taxes to land only. And then set the taxes so high that the purchase price of land is as close to $0 as possible, which means that there will be both small positive and small negative valuations for the land (because of the tax burden). This is equivalent to taxing away the land rents: the unearned appreciation of value in property that comes from those around you, rather than what you build. In this sort of system, other taxes can decrease quite a bit as well.

jbay808 6y ago
Basically this means that all land is effectively rented from the government. It's an interesting proposal, but how would price discovery occur?
- epistasis 6y ago
  There are still sale prices, the difficulty is separating the land portion from the improvements portion. This is currently performed for many purposes, including insurance, which has the benefit of being tied to somebody's valuation, rather than a standard assessors estimate. However, this idea originated from a time before we had zoning restrictions like we do today. Which also means that any change in zoning would result in a big change in land value too. One could also imagine transferring zoning allowances, much like air rights are sold in NYC, so that people that don't want to change their property can instead give their greater density allowance to person down the street that wants to change their duplex into a fourplex, or something. Such transfers would also be near to zero dollar activities. But given our current difficulty with handing out any sort of zoning change to allow more people to live in high demand areas, I start to think that this idea is hopelessly poisonous to land politics of entrenched powers (land owners). Still, one can dream.
  - srtjstjsj 6y ago
    Sale prices are part of a feedback loop with taxes.
joeseppy 6y ago

cpascal 6y ago

I like the idea of a vacancy tax that is proportional to the value of the property so that any year-over-year gains in equity are eaten up by such tax. I think turning a vacant property into a liability instead of an asset would do a lot to keep housing accessible.

webmobdev 6y ago
The Tamil Nadu state government (and a few other states), in India, did something like that - when the real estate market fell a bit, the government noticed that the developers were still holding on to many ready-to-occupy flats (condos) in the hopes of getting a higher price later. The government immediately issued a notice that once a residence is constructed by such developers and is ready-to-occupy, property tax and utility bills (for water) has to be paid for it whether it is occupied or not. Thus builders stopped building in excess or holding on to it to cut supply and artifically raise demand (and thus prices).

throw0101a 6y ago

BC has vacancy tax: * https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy... If there is no registered resident for a domicile then the owner gets charged. Not sure how useful it's been: * https://www.cbc.ca/news/canada/toronto/vacancy-tax-delayed-2021-1.5451985 https://www.cbc.ca/news/canada/toronto/vacancy-tax-delayed-2...