3 ms·
I don't know about Canada, but in the US there are some tax law changes that could drastically reduce 'land hoarding' and help encourage excess capital to flow
by VirusNewbie 5y ago
I don't know about Canada, but in the US there are some tax law changes that could drastically reduce 'land hoarding' and help encourage excess capital to flow into construction of new properties rather than rent seeking.
Right now 1031 exchanges mean real estate over many other types of investment are tax advantaged, (I can't do the same thing with my stock for instance) and doubly so for places that put caps on property taxes.
The US (and canada?) should heavily tax capital gains on land appreciation for all but your primary residence, at the same time it would give tax incentives on capital gains for constructing new units.
Right now excess capital is encouraged by multiple tax laws to just play the rent seeking game waiting for land appreciation while others do the hard work of causing an area's land to become more valuable.
- TheCowboy 5y agoTax law changes don't change zoning policies or other political obstacles to construction. People exist with money willing to invest into construction if they could. People also like to hate on politically-connected 'greedy developers' but they create an environment where that's the type of companies that are going to thrive. Maybe people here would do better to visualize it in startup terms where people are willing to put excess capital to use. Imagine you needed to get approval of neighborhood committees and so on to do a startup. Would YCominator still look the same? I don't think it would. You would have VCs that more about forming cozy relationships with politicians and poker brokers.