5 ms·

2. I would suggest to have the same tax for everyone, but make it (and rent) deductable to a certain degree, if it is for your primary residence . Ideally, it

by yokaze 6y ago

2. I would suggest to have the same tax for everyone, but make it (and rent) deductable to a certain degree, if it is for your primary residence . Ideally, it should be net-zero for people living there.

cletus 6y ago
So real estate has a number of problems: 1. It's clearly used for money laundering and hiding money from hostile governments. In Europe, this is a huge factor in the London real estate market. 2. Cities die when people can't afford to live in them. This is exacerbated by restricting supply to simply park money. Often the ultra-wealthy buy a place where they'll spend 3 days a year because they like that place (eg NYC). In doing so, they're contributing to making that place worse. This behaviour should have a cost; 3. There are cities around the world that have pockets that are essentially vacant because of (2). Condos in Manhattan have a notoriously low occupancy rate. I've heard Tel Aviv has this issue as well. There are many others; 4. In many places it's more profitable tp produce (unoccupied) ultra-luxury property. A lot of the building in NYC is north of $4000/square foot. That's... insane. 5. Property taxes in NYC, as one example, are highly regressive. a $1m condo may have property tax of $1200/month. A $100m apartment may only incur $16k/month in property tax. The counterargument is that the more expensive apartment uses just as many services. Personally I think subsidizing ultra-luxury property is just bad. Some jurisdictions (eg Vancouver) have tried to punitively tax "non-working" real estate, which is to say real estate that sits vacant. I don't think this has had much impact and it's probably really easy to game (eg rent it out to a family member notionally). My philosophy is that: 1. Ultra-luxury properties are generally speaking bad for a city. They take up a disproportionate amount of space and tend to add nothing to the city. It's fine that they exist but we shouldn't be subsidizing their construction and continued existence; 2. Providing rental units for people who live in the city is a better use of capital than parking foreign money. As such, both parking money and foreign investment should be taxed at a higher rate. Local landlords are better than remote landlords (since those local landlords are part of the city). Personally I think that if you own property in NYC, for example, then the state and city of New York gets to tax your income as if you were a resident. LLCs to hold property are the obvious dodge so these need to be taxed punitively.
- sprafa 6y ago
  People are waking up to this slowly. Globalization of capital is destroying the ability of local populations to purchase real estate in the places they themselves live. Multiple cities in Europe, even outside of London, are suffering from extreme Airbnbnization, where buildings are pricing out locals just because it's 3x to 10x more profitable to build them for airbnbs.
  - ac29 6y ago
    I'm curious where in Europe has a 10x difference between short term and long term rent. This suggests an Airbnb unit renting for $100/night (and maintaining 100% occupancy all year) could only rent to a local long term renter for ~$300/month?
    - fakedang 6y ago
      Just checked for Barcelona. A few years back, I remember checking a studio for 300 euros. But now, although the average price per night is 50 euros, I could still find a few places with 100+ euros. This is obviously a rough calculation and doesn't take into account the pandemic effects on prices either.
      - yokaze 6y ago
        I had a look too: "Modern stylish, Paseo de Gracia", 1 bedroom apartment, the whole of June: 25.347€. Maybe an outlier. Looking at Idealista, I would put it the rent at 2500€/month tops.
    - sprafa 6y ago
      Lisbon.
- yokaze 6y ago
  My philosophy is, whatever is bad, make people pay so much for it, that it will be (net-)positive. If they still do it, what's the problem? > 1. Ultra-luxury properties are generally speaking bad for a city. They take up a disproportionate amount of space and tend to add nothing to the city. It's fine that they exist but we shouldn't be subsidizing their construction and continued existence; I am not so sure about the first part, but I agree with the second. The proposal I made would in fact be a slightly progressive tax. I have no problem someone buys a $10million apartment in NYC and keeps it for a holiday in a year, if it say, costs $1 million in taxes per year and pays for a lot of other apartments, public transit, etc... > 2. Providing rental units for people who live in the city is a better use of capital than parking foreign money. As such, both parking money and foreign investment should be taxed at a higher rate. Local landlords are better than remote landlords (since those local landlords are part of the city). I have to disagree here. On two counts. First, parking foreign money can be utilised to provide rental units who live in the city. We "only" have to frame the laws and tax code accordingly, and who cares then, what nationality the money has. I also have to disagree on the assertion that local landlords are better than remote ones. Local ones may care for the city, or they care more about earning more money, and know all the tricks in the book. Remote ones may not care much about the city, but they also may simply have no idea of the local market, and do not want any trouble. You may guess, how my experiences were in that regard. I think, we should not tax/punish people based on our prejudice we may have on them, but formulate a tax code, which punishes "bad behaviour" regardless of the nationality of the actor.

by yokaze 6y ago

cletus 6y ago

So real estate has a number of problems: 1. It's clearly used for money laundering and hiding money from hostile governments. In Europe, this is a huge factor in the London real estate market. 2. Cities die when people can't afford to live in them. This is exacerbated by restricting supply to simply park money. Often the ultra-wealthy buy a place where they'll spend 3 days a year because they like that place (eg NYC). In doing so, they're contributing to making that place worse. This behaviour should have a cost; 3. There are cities around the world that have pockets that are essentially vacant because of (2). Condos in Manhattan have a notoriously low occupancy rate. I've heard Tel Aviv has this issue as well. There are many others; 4. In many places it's more profitable tp produce (unoccupied) ultra-luxury property. A lot of the building in NYC is north of $4000/square foot. That's... insane. 5. Property taxes in NYC, as one example, are highly regressive. a $1m condo may have property tax of $1200/month. A $100m apartment may only incur $16k/month in property tax. The counterargument is that the more expensive apartment uses just as many services. Personally I think subsidizing ultra-luxury property is just bad. Some jurisdictions (eg Vancouver) have tried to punitively tax "non-working" real estate, which is to say real estate that sits vacant. I don't think this has had much impact and it's probably really easy to game (eg rent it out to a family member notionally). My philosophy is that: 1. Ultra-luxury properties are generally speaking bad for a city. They take up a disproportionate amount of space and tend to add nothing to the city. It's fine that they exist but we shouldn't be subsidizing their construction and continued existence; 2. Providing rental units for people who live in the city is a better use of capital than parking foreign money. As such, both parking money and foreign investment should be taxed at a higher rate. Local landlords are better than remote landlords (since those local landlords are part of the city). Personally I think that if you own property in NYC, for example, then the state and city of New York gets to tax your income as if you were a resident. LLCs to hold property are the obvious dodge so these need to be taxed punitively.

sprafa 6y ago
People are waking up to this slowly. Globalization of capital is destroying the ability of local populations to purchase real estate in the places they themselves live. Multiple cities in Europe, even outside of London, are suffering from extreme Airbnbnization, where buildings are pricing out locals just because it's 3x to 10x more profitable to build them for airbnbs.
- ac29 6y ago
  I'm curious where in Europe has a 10x difference between short term and long term rent. This suggests an Airbnb unit renting for $100/night (and maintaining 100% occupancy all year) could only rent to a local long term renter for ~$300/month?
  - fakedang 6y ago
    Just checked for Barcelona. A few years back, I remember checking a studio for 300 euros. But now, although the average price per night is 50 euros, I could still find a few places with 100+ euros. This is obviously a rough calculation and doesn't take into account the pandemic effects on prices either.
    - yokaze 6y ago
      I had a look too: "Modern stylish, Paseo de Gracia", 1 bedroom apartment, the whole of June: 25.347€. Maybe an outlier. Looking at Idealista, I would put it the rent at 2500€/month tops.
  - sprafa 6y ago
    Lisbon.
yokaze 6y ago
My philosophy is, whatever is bad, make people pay so much for it, that it will be (net-)positive. If they still do it, what's the problem? > 1. Ultra-luxury properties are generally speaking bad for a city. They take up a disproportionate amount of space and tend to add nothing to the city. It's fine that they exist but we shouldn't be subsidizing their construction and continued existence; I am not so sure about the first part, but I agree with the second. The proposal I made would in fact be a slightly progressive tax. I have no problem someone buys a $10million apartment in NYC and keeps it for a holiday in a year, if it say, costs $1 million in taxes per year and pays for a lot of other apartments, public transit, etc... > 2. Providing rental units for people who live in the city is a better use of capital than parking foreign money. As such, both parking money and foreign investment should be taxed at a higher rate. Local landlords are better than remote landlords (since those local landlords are part of the city). I have to disagree here. On two counts. First, parking foreign money can be utilised to provide rental units who live in the city. We "only" have to frame the laws and tax code accordingly, and who cares then, what nationality the money has. I also have to disagree on the assertion that local landlords are better than remote ones. Local ones may care for the city, or they care more about earning more money, and know all the tricks in the book. Remote ones may not care much about the city, but they also may simply have no idea of the local market, and do not want any trouble. You may guess, how my experiences were in that regard. I think, we should not tax/punish people based on our prejudice we may have on them, but formulate a tax code, which punishes "bad behaviour" regardless of the nationality of the actor.