Something similar is common in the US, and is typically framed as a homestead exemption. Basically, set a high property tax rate and if people prove their house is owner occupied give them a rather large discount. My property taxes are ~$1500/year because I live in my house. People who rent out or do not live there pay $6000-$8000/year in my neighborhood.
1. If you own the home, you will pay $13,500 ($12k mortgage + $1500 taxes) per year.
2. If you own the home, and want to rent it to a tenant, you must charge the tenant at least $18,000 ($12k mortgage + $6k taxes) to break even.
Renters are in generally less wealthy than owners. Why have this extremely regressive tax? Why should the poor renter subsidize the rich homeowner?
He's not subsidizing, is he? The tax just goes to the government. Essentially it's an extra tax on renting.
(Which suggests that the cost gets passed along and so it is a hit to the renter.)
Yes, which is why a VAT is much saner than a sales tax.
A stable, indebted population is a governable and docile population. Somewhere there's a great quote about how "any man with a cottage of his own and a yard will never be a revolutionary, he's too busy" but I can't find it right now.
Picked it up from a talk by David Harvey, but not sure where he got it from.
That's a good reason to have the mortgage interest deduction. The real reason is that home owners vote, and promising them money is a good way to get them to vote for you.
Rental market is more of a market than say, buying a house. It is very much determine by salaries people make in the area. Unlike buying a property, which also has the element of credit availability and willingness of people to borrow, you cannot borrow to pay rent. The point being, owner can TRY to price tax into the rent, but if this prices property too high it will not rent out.
(Edited: typo)
from TFA: "Principal homes, as well as properties that are rented for at least six months of the year on 30-day minimum leases, won’t be taxed."
I would be very surprised to learn that Vancouver renters who typically live in units with < 30-day leases turn out to be poor.
ie) You can't claim your house has been occupied for 6 months because you've had 30 one-week AirBnB listings in there over a year.
Here in New Zealand, I can hand my landlord a 14 day notice to remedy, and if they don't fix the problem within 14 days (or at least start remedying, if it's a larger problem), then I can take them to the Tenancy Tribunal, where they can be ordered to, and sometimes even get fined punitive damages.
The same works the other way. If I leave the house in an unsatisfactory condition (e.g. not cleaning the property, not keeping the garden under control), then I can be given notice to remedy and taken to the tribunal if I don't fix it.
It's a win-win system, both parties can take action against the other for problems. The tribunal is not meant to be biased towards the landlord or the tenant (although in practice they tend to side with the tenant a bit more), and is a neutral third party. They usually try mediation first, before actually ordering people to do anything.
Anyway I am not aware of anywhere in the US where being a slumlord is actually legal or even being a semi-slumlord.
30 days for a maintenance request is absurd, well depending on the request, I guess.
If an essential service breaks (toilet, hot water system, plumbing, gas leak) and the landlord doesn't have it remedied in reasonable time frame, you can pay for the remedy and issue an invoice to the landlord (in practice you can withhold the same amount from rent).
Worded thusly: organise to have urgent problems fixed and give the landlord an invoice from an authorised repairer. A licensed professional must do the repairs and provide a report that states the cause of the problem and the work carried out.
A landlord may be breaking the conditions of an agreement if they learn of a problem and don't repair it within a reasonable time.[1]
I firmly believe this is how it should be, and that any reasonable person would agree this is fare.
1. https://www.sa.gov.au/topics/housing/renting-and-letting/ren...
i.e if I earn $100 by working at a job, and $100 through renting out a property, shouldn't I be taxed the same as if I earn $200 through my job instead?
Even if you were to take the unwise, for both legal and tax reason, choice to not use a hold co, income from rent is FUNDAMENTALLY different from regular income. In that, if you make a loss, you can claim it. That's just not possible with regular income. I.e., if you rental unit is unprofitable, it reduces your taxes in general -- potentially applied in future years. This is not the with "active" income.
I'm actually really curious about the law now. Stock dividends must be considered passive income. So would interest from your local bank savings account. So would a SaaS app that you set up and basically runs itself with minimal maintenance.
The bigger part of the problem is the tendency to pass on the tax on passive income to the tenant.
They'll offload it to a property manager/real estate agent to do all that work.
There are so many incorrect statements in this sentence, I don't even know where to begin.
Taxing vacant properties does not punish renters. It "punishes" people who buy properties for speculation, or (as the AirBNB trend is going) attempt to control a piece of limited supply.
The purpose of taxing passive income (lazy landlords, rent collecting) more aggressively is because it is not actually work. It is technically wealth extraction. As a renter, 100 percent of your rent is a "tax" (it's not going to offset any of your long-term assets); and when you pay 70-90 percent of your income in rent as a tax (as many minimum wage workers do), it is massively difficult, if not impossible, to save enough to acquire any assets that help you build wealth. On the landlords' side, it's even easier to use all that extracted wealth (from poor people) to acquire assets that build wealth.
No, collecting rent is not work or a job. Even if you have a whole fleet of illegal immigrants scrubbing the toilets, throwing down cheap carpet, and painting the walls of your units every few years. The moment you enter the territory of needing to pay somebody else to manage your asset (even if it is "just" scrubbing the toilets after your AirBNB tenants or renters leave), you're entering passive income territory.
I rent, by choice. My landlord takes the risk of owning the property, and I pay a premium for that. Something breaks, I make a call and it's his responsibility. Just because some landlords are bad people doesn't mean landlords are bad people in general. I appreciate the benefits I get from renting (and, to be fair, from having a good landlord).
By your logic, owning a small company with some employees is passive income and "bad", because you have people doing work for you. Some small company owners are bad people but that doesn't mean all of them are (and, in fact, we tend to consider them fondly from what I've seen).
You pay a premium so your landlord can take risk to get the most lucrative profits? Why, you are a benevolent renter, aren't you?
By your logic, owning a small company with some employees is passive income and "bad",
That is not at all what I said; your reading comprehension needs work. Owning a company with employees[1] means you are responsible for allocating the income into business profits among your employees. Most people who scrub toilets and wash sheets for AirBNB rentals are NOT employees or the owners of the properties. Along the same lines: the right way to treat employees involves giving them part ownership of the company they are working for, and thus they are rightfully entitled to some of the income from business-generating assets. Landlords do not do this. They farm out the work required to manage or maintain the assets, and demand the lion's share of the profit.
[1] There is a definite legal definition of "employee", and you don't seem to understand what that is. See the IRS's definition. https://www.irs.gov/businesses/small-businesses-self-employe...
> Why, you are a benevolent renter, aren't you? To some extent yes. I believe my landlord charges me enough to cover what it costs him to pay for/maintain the place I live, plus some amount for the risk he takes on in owning it (major repairs, etc), plus some amount of profit that I find reasonable. Not all landlords set <some amount of profit> at unreasonable levels.
The only tax that discourages renting out is that the portion of your principal residence used for renting out no longer qualifies for tax-free capital gains.
Considering how almost nobody in BC ever declares this, and barely anything is done to curb it, it's kind of a moot point.
Making rentals more expensive pulls in more Federal money in low income property and encourages purchases by middle class families.
The subtlety you're missing here is the reduction in supply of rental units.
https://www.acgov.org/assessor/decreasetax/exemptions/homeow...