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Empty buildings should incur a tax that increases every month they remain unoccupied.
by Causality1 5y ago
Empty buildings should incur a tax that increases every month they remain unoccupied.
- chrisseaton 5y agoLol what would you do if just nobody happens to want to rent your unit? You have to pay an increasing tax for the rest of time? You couldn't sell it because who would want to buy it. Not a sensible idea.
- valine 5y agoIf no one wants to buy you drop the price until they do. Not saying it’s a good policy, but it would drive down real estate speculation and lower rent.
- chrisseaton 5y agoWhat if you drop the price to zero and still nobody has any use for it at the moment?
- valine 5y agoPresumably the vacancy tax would be tied to the value of the property. If the property really is worthless you won’t be paying taxes on it.
- chrisseaton 5y ago> Presumably the vacancy tax would be tied to the value of the property. > increases every month It can't be both things at the same time. And who's setting this land value? If it's on the market and nobody's buying then we don't know the value.
- robinson7d 5y agoWhy can’t it be both? Could have a logarithmic scale, could have it increase by a fraction of a % of $(value - currentTax) so that it increases more slowly over time. Not saying I agree with the underlying idea, just confused about why “increases ever month” necessarily means it cannot be “tied to the value of the property” in a `calculateTax(propValue, timeEmpty)` sort of way.
- datastoat 5y agoHow about making the tax increase each month the unit is unoccupied, but also making it proportional to the asking rent? No one has any use for it, high asking rent => high tax. No one has any use for it, very low asking rent => low tax.
- ectopod 5y agoIf nobody will buy the property for $1 then it's worthless. Gift it the local authority and then you won't have to pay the tax.
- chrisseaton 5y agoPeople won't buy it because it comes with a tax burden. They might buy it to redevelop it if it didn't.
- ectopod 5y agoSo over time the vacancy tax is increasing and the sale price is going down. Obviously the vendor needs to sell or redevelop before the price hits zero. If they fail to do so then they lose the property. Speculation sometimes fails. What's the problem?
- effingwewt 5y agoGood, then it will go to someone who needs a house, not another rent-seeking parasite.
- dwater 5y agoThat does not seem like a realistic problem for very many places. If a jurisdiction contains land with so little value that it won't support the taxes required for upkeep of the jurisdiction, then the jurisdiction could dissolve. Which is what happens to a ghost town I would imagine. That is not likely to happen to New York City.
- tomjen3 5y agoThat would require that nobody has any extra use for free/cheap space. It would mean that nobody needs additional storage space, nobody needs space for a studio or an office. This would essentially only happen if you rented in a mega high crime area, which means landlords would be incentivized to do something about crime.
- rdtwo 5y agoThen you use a percent of asking rent
- deleted 5y ago[deleted]
- dukeyukey 5y agoTie it to a percentage of the land value. So, units in areas of high land value get taxed more and more, incentivising either using the lot for something people want, or selling it to someone who will. Whereas units in areas of low land value get taxed much less, reflecting the higher difficulty in getting good value from it.
- chrisseaton 5y agoWho's assessing the land value? Can I assess the value of your house at $5, and then tax you for not selling it to me at that price? Bizarre.
- dukeyukey 5y ago> Who's assessing the land value? Presumably the local government, they already do this to calculate property tax across North America, and getting only the value of the land is easier than the value of the land plus property on top of it. It really isn't changing much in this regard.
- throw0101a 5y ago>> Who's assessing the land value? > Presumably the local government Actually it's an independent agency of the provincial government: > The Municipal Property Assessment Corporation (MPAC) administers property assessments and appeals of assessment in the province of Ontario, Canada.[2][3][4] MPAC determines the assessed value for all properties across Ontario. This is provided in the form of an Assessment Roll, which is delivered to municipalities throughout the province on the second Tuesday in December. Municipalities then take the assessment roll, and calculate property taxes for each individual property in their jurisdiction. MPAC complains that taxpayers often confuse MPAC's role as an assessment agency for taxes; MPAC responds that it only provides assessments. Municipalities set the tax rates and distribute the tax burden based on the assessed values provided by MPAC. […] > Every municipality in Ontario is a member of MPAC, which is governed by a board of directors composed of taxpayer, municipal, and provincial representatives.[6] * https://en.wikipedia.org/wiki/Municipal_Property_Assessment_Corporation https://en.wikipedia.org/wiki/Municipal_Property_Assessment_...
- shadowgovt 5y agoYou would eventually render it to the state. There are pros and cons to this idea.
- chrisseaton 5y agoWhy would the state want it? Wouldn't they have to pay the same tax as other people?
- shadowgovt 5y agoPay tax to whom? The state? If the state owns the property, they lose the opportunity cost of taxes paid by a private owner. So, they're heavily incentivized to return it to private ownership as soon as possible... Or to consolidate several such properties into something that is sellable, or to repurpose the property into something people need, like more housing.
- asdfasgasdgasdg 5y agoIf the value of the property is so low that I you can find no one to rent it at or above your costs, there is always the option to abandon it. At least in the US, you don't have obligations toward property you have abandoned.
- rdtwo 5y agoThen you need to donate the space to a community organization or pay taxes. The donation can come in yearly increments until you fill it.
- partomniscient 5y agoEventually you'd have to sell it cheap enough that someone would buy it, or, rent it cheap enough so that someone will use it preventing your tax. It doesn't seem totally unreasonable. Is there an equivalent of adverse posession (squatters rights) for retail?
- hellbannedguy 5y agoJust fill out a "No interest" form with the county. Penalty for lying would be steep. I don't think lack of interest would be a big problem in most areas. Yes--there will be skirters of the tax, but would it be worth a big fine?
- jl2718 5y agoFor every solution, there are 10 new problems created that require new solutions. It never ends. It never goes backwards. Bureaucratic parkour. Software engineers should understand this. Imagine if it was 10x harder to delete a line than write a new one. Also, no forking and no starting over.
- tenebrisalietum 5y agoThen the unit is in a bad place and shouldn't be there. It should be demolished and turned into a park, surrounding social issues addressed, or maybe combined with an adjacent unit.
- nemo44x 5y agoIt’s private property - the owner should be free to use it as they see fit.
- mikepurvis 5y agoHaving it empty is a negative impact on the surroundings, not dissimilar to a bad smell or loud noises. It's perfectly reasonable for the city to have a say in this.
- refurb 5y agoYou really want to go down that path? Negative impact is pretty subjective. Maybe we should tax all the dog owners too? To offset the noise and dog poop that doesn’t get picked up?
- inglor_cz 5y agoDog taxes are actually levied in some places, including developed countries. https://www.iamexpat.de/lifestyle/pets-information-germany https://www.iamexpat.de/lifestyle/pets-information-germany
- dukeyukey 5y agoPart of a government's job is to play a role in shaping laws and society in ways that make it nice to live in, and if (for whatever reason) the current set-up is incentivising a lot of unused land even while pricing people out of the area, then taking action against it sounds reasonable. It might not gel with your (I imagine) rightish libertarianish beliefs, but it certainly fits with the general idea of the role of government, especially local government.
- nemo44x 5y agoWhy not just let the market take care of it? I’d support not incentivizing vacant property (via the tax code, limiting deductible losses and/or write offs on real estate) but absolutely do not believe government has a right to force a property to rent their property out. That’s tyranny. And what wound stop the property owner from just creating a “business” that is open “by appointment only”? There would be many ways around it.
- refurb 5y agoThat sounds like a great way to get people to replace retail space with a more productive asset.
- inglor_cz 5y agoThis would not work e.g. in my native city which lost some 12 per cent of the population since 1990. In such conditions, some properties will inevitably stay vacant for long periods of time. Fewer people, less demand for services.
- tomjen3 5y agoIf the price of the services go down enough, that should cause people to move to your city, because it has cheap cost of living.
- inglor_cz 5y agoWell, I am going to move back next year, and indeed the reason is a combination of "much lower real estate prices" and "I can do my work remotely most of the time". But the second condition does not apply to everyone, so the job market will always play a role. My wife, for example, will probably make much less there.
- rtkwe 5y agoIt doesn't have to be completely blind, the local council could have options to waive or adjust the taxes or the law could include ways to show the landlord is trying to attract tenants by lowering the rent or something. Also most of the places this is suggested for aren't significantly shrinking.
- motohagiography 5y agoProperty taxes are a cost passed on to renters or potential renters, so an increasing empty-building tax proposal means increasing the price of something people don't want until the owner is forced to sell it. This is the quality of logic of tax policy advocates, and it needs to be addressed directly. I'm all for churning unoccupied spaces, but there are better ways.
- hellbannedguy 5y agoThis is technically a property tax. I don't like most property taxes. That said, an unoccupied tax makes sence now. I would throw residential apartments, homes, into the mix. (Single owner properties would be exempt. Realestate investment trusts would be targeted with this tax, along with foreign investors--rich people whom are not citizens whom buy our land, and let it sit.)
- motohagiography 5y agoSo long as you understand that all taxes get passed on in the gross price to the renter, and this causes bubble of inflation in the very thing you intend to make accessible. While I don't necessarily advocate it, I'd say disqualifying empty buildings from insurance would do more to that end, as no bank or lender will take an uninsured asset as collateral on leverage/debt. The ones who do lend against that uninsured asset will impose interest rates on the debt to where it is cheaper for the owner to just rent the space. It would be anti-inflationary as well, since it would reduce the amount of free money caused by cheap debt in the economy. When you see empty buildings, you have to ask who benefits, and in the end, it's always the banks.
- toast0 5y ago> While I don't necessarily advocate it, I'd say disqualifying empty buildings from insurance would do more to that end, as no bank or lender will take an uninsured asset as collateral on leverage/debt. Unoccupied buildings generally require different insurance than occupied buildings, and it's often significantly more expensive. Although, apparently, not more expensive enough to balance the incentives to leave property empty.
- kec 5y agoRather than a sliding scale, why not something like x% of the 12 month average asking rent? If x is high enough that should be a great incentive for landlords to find and stay at the market clearing price.