Author Topic: Why are we subsidizing property taxes of millionaires?  (Read 1509 times)

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Offline kimmy

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In my area, the rental vacancy rate is vanishingly close to zero, and "what the market will bear" is pretty outrageous.  I know what property taxes on apartments like mine are, and I know what similar apartments in my area are renting for, and I can say with complete confidence that property taxes are a trivial factor in rental prices.

That is why I think it is not productive to talk about "fairness".  I personally do not think paying taxes embedded in the cost of things is the same paying a tax directly because the line of accountability between the cost and the reason for the cost is broken. This leads to bad decisions on the part of the customer that is paying the hidden cost (i.e. how many people would use credit cards if the 2% fee was added to the purchase price?).

That's the assumption?  People have chosen to rent because they're making a bad decision? If they were aware that their rent includes money that the landlord will use to pay property tax, they'd make a different choice such as buying a home of their own?

What is worth talking about is how laws and regulations can be adjusted to increase the supply of rental properties. Extending the home owners grant to properties that are actually rented could be one of those measures. Simply eliminating the grant and reducing taxes on properties held like gold bullion would not be helpful.

How many landlords actually create rental properties?  Not many.   Some turn their basements into rental suites... but most landlords are buying properties condominiums off the real estate market and renting them out.  Making landlordship even more profitable is primarily going to increase demand for real estate even further, putting home ownership even further out of reach for the less wealthy and giving the more wealthy even more advantage.

Here in my town the city council approved a subsidy for a developer to create Affordable Housing. The developer went out and built an apartment building with smaller, less luxurious units, intended to be ideal "starter homes" for first time buyers and young single working people and that sort of thing. And before the mortar was even dry, rental listings started showing up for apartments in the new building, renting at the same outrageous prices as everything else in this town.  So much for "affordable housing".  City council accidentally subsidized yet another way for the wealthy to cash in.

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