4 ms·

Wouldn't the higher taxes just be passed off to the renter?

• slt2021 4y ago
  rent is always priced to maximum of purchasing power. If there was any more leeway to raise rent and keep renters, it would have been raised already by landlord
  • mym1990 4y ago
    This seems to be a textbook answer, but in reality we live in a world where people(renters and homeowners) have imperfect information. There is no renter out there that knows exactly how much they can get to the dollar. They have to compare with market prices and make a reasonable guess.
• jon_adler 4y ago
  Potentially in the short term, if government were to introduce such tax policies as changes to the status quo. These types of short term changes/issues can perhaps be remedied via short term tax credits or similar for those renters impacted. In the longer term and at the macro level, renting ultimately competes with cost of mortgaging. If the cost of home ownership goes down, so should rents. Again, government backed loans could help those renters who can afford the monthly repayments but lack the upfront deposit/capital to purchase. What is needed is lower residential house purchases prices which will flow into rental costs (eventually). In the long run, rents are always based on the underlying asset value. The other thing that could help lower residential property prices is obviously on the supply side, which I have deliberately avoided.
• yobbo 4y ago
  When there is deficit of supply, prices stabilize at the margin where increasing price also decreases the quantity sold. Monopoly prices = increasing prices reduces revenue. Also look up "rent seeking".