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This appears to be in Denmark where these allotments are called 'kolonihaver'. Traditionally 'kolonihaver' were intended for recreational use and vegetable gar
by masaha 5y ago
This appears to be in Denmark where these allotments are called 'kolonihaver'.
Traditionally 'kolonihaver' were intended for recreational use and vegetable gardens for workers living in apartments in the larger cities. You were not allowed to live there full time and you should always have an ordinary home beside it.
Unfortunately the rules are not followed, and for a very large part they get used as a small property with a tiny house for the whole year. Not really for recreational use or growing vegetables - mostly for living cheap in expensive cities. I say unfortunately, as living in them are clearly an tax evasive action.
No property tax is payed, while their values rises like most ordinary properties. The Danish property tax is intended to tax the value gained by increasing property values. So when you live in one of these kolonihaver this way you are doing tax fraud. Even though it's mostly never investigated and punished.
It easily gets glorified as a smart and cheap way of living, when you present it like this in a blog post shared on a global forum(HN). But unless you voluntarily pay tax on the monetary gain you'll have the day you sell it again, I despise your lack of contribution to, and participation in, our Danish society.
- Rerarom 5y agoWhat would be a smart and cheap way of living in Denmark that doesn't have this problem?
- lifeisstillgood 5y agoHang on - there is a - for want of a better term - Capital Gains Tax on property price rises? Wow. Is it working? The UK had a simialr tax in the late 40s - it enabled the building of the "new" towns like Milton Keynes and Harlow (where I was born). Simply put, if everyone knew the government was going to build a ton of new roads and schools on that field, then you would be crazy to sell the field for anything less then a fortune. But if everyone knew the government was going to simply tax the fortune straight back at 100% then you sold the field for a fair value, and the government spent the money not on buying the field but on roads etc. Since that was repealed in 50s no similar large scale house building has been affordable.
- xvedejas 5y agoThis is the concept of a Land Value Tax (LVT), except that unlike a property tax, LVT wouldn't tax your own improvements to property (like building a house), only 100% of fortune gained from land appreciation.
- lifeisstillgood 5y agoBut how to implement a LVT? There is a comment just above that profit from selling a house is taxed as income! (!!!) As long as commerical and personal taxes are aligned, that seems a strong solution. But no politician in US / UK could survive after introducing it.
- msh 5y agoThere is not capital gains tax on housing (in denmark), even if some politicians would like that. In Sweden its reverse, low property taxes but profit on selling is the house is taxed as income. In Denmark the profit is tax free. You are paying property taxes for houses every year, these taxes are in theory based on the value of the house even if they have been lagging the real value of the house. I think the post refers to the point that you don't pay property taxes.
- osullivj 5y agoThe UK still has capital gains tax on sales realising property appreciation. The main exception is on a vendor's principal residence, so most home owners never pay it.
- lifeisstillgood 5y agoThe impact of such a tax would be to hold back the huge climb in residential / urban property prices and so funnel it into something more socially useful Having the tax miss 99% of the sales that drive that growth kind of misses the point :-(
- osullivj 5y ago
- Aeolun 5y ago> It easily gets glorified as a smart and cheap way of living Probably because it is? Have you tried buying a real house in any western country recently? Unless you’re already a milionaire it’s damn near impossible to find anything at a reasonable price. The taxes are not the problem. The initial cost is.
- msh 5y agoWhat is a reasonable price to you? You can in Denmark borrow 95% of the house/apartment price at very low interest rates. I have a fixed rate 30 year mortgage at 1% interest rate for 80% of my house value, the rest if a loan is needed would be a bit higher. If you are willing to gamble with a variable rate loan you can get negative rates at the moment. Houses near metro areas are expensive but outside that they still seem reasonably priced.
- lostlogin 5y ago> What is a reasonable price to you? I’d say 5x median salary would be reasonable, and maybe a little more. Where I am, Auckland, it’s about 20x and this is a significant negative.
- mrweasel 5y agoDenmark is more like 6 - 10 times the median salary, but that will get you a very nice home in most of the country.
- masaha 5y agoA) Yes, if you don't have a problem with not paying taxes. B) Yes. C) I disagree. General rule here in Denmark is that house price, you can afford a mortgage for, is 3x your household income before tax.
- Semaphor 5y agoI have not, but I have friends who did here in Germany. If you are okay living in the middle of nowhere (that includes no, or laughable public transport), you can get one for 500k€. If you also have relevant skills (and friends/family with those as well), you can buy one that needs renovation for half of that. My experience is in Northern Germany, I heard of even lower prices in the east.
- srtjstjsj 5y agoIt's weird to have this tone of hating on someone for not having two homes. If he can live without occupying a giant property, good on him. Why should only rich people get allotments? Any tax he owes can be deducted from his carbon/pollution under-footprint.
- dagw 5y agomostly for living cheap in expensive cities. Are they still cheap in Denmark? Here in Sweden they tend to cost almost as much as a small flat if they're anywhere near an expensive city.
- masaha 5y agoYou are right. The prices has been rising quickly and closing the gap. My point being that these price hikes should have been taxed or been taxed like all other properties. But due to the lack of property tax, they end up being the cheap alternative.
- bserge 5y agoWhy isn't there a tax then? This is the same bullshit as being self-employed for one employer. The worker is punished. Why? Go after the companies employing people this way. But no, let's ruin some (literally) poor guy's life because he dared try making money and didn't understand that it's illegal.
- giarc 5y ago>I despise your lack of contribution to, and participation in, our Danish society. This is quite a strong statement. The author is a student and does not live in this full time. Therefore he seems to be following the laws and, I would argue, is contributing to society.