You mean income derived from the property? Seems like that could inflate rental prices, and shift the affordability problem to another set of people.
The state government in Victoria (Australia) is planning to tax vacant properties, but it's self reported and seems easy enough to dodge. At first the proposed measuring water usage to determine if the property was vacant, but then you can only tax as much as it would cost to leave a tap on.
No, a regular property tax based on the value of the property. Such as 1% of the value paid in tax every year.
The idea would be that it would be zero net effect if you live in the country (i.e. it's a property tax + income tax deduction that effectively make them together be a "tax on properties owned by foreigners")
Property should not be an investment since it is an essential for living.
Exactly. But the idea is that it's very hard to check whether someone lives in a property, so you check for the next best thing: whether you have income in the country. So if you have income tax in the country then you can get exempt from one property tax.
Otherwise you end up having things like "self reporting" where you live, or local governments trying to check water/electricity use to see whether buildings are occupied etc, which are obviously both expensive and futile.
You could have a 10% market value property tax, and a deduction of 90% of that amount, for one home, on your income tax, then 75% for a second property etc, to make it both prohibitively expensive for foreigners, and a bit progressive for those owning multiple homes.
An increase in average wage growth would support both owner-occupiers and first time buyers.
Speculators can move their investments, but they have to accept the loss in order to do that.
An increase in wages without fixing the underlying drivers for property price growth will not support owner occupiers or first time buyers at all, because property price growth will match or exceed that growth.
Crash prices, keep them low and stable after, it will be rough and unpopular for a while but will eventually be the best outcome.
This is easily gamed if Chinese millionaires are truly at fault. They just set up a numbered corporation and "employ" their nephew whose living there.
Further, if people are actually employed and paid, they also pay income taxes. So now the property is even higher cost. Since to pay a person a minimum wage over the year (and the taxes and added costs that gives) is probably more than the property tax for foreigners would have been. Most importantly, the cost of either the property tax or the income tax solution should be higher than any expected gains in the property value (or at least enough to make it useless as an investment).
The best way to game this system would probably be to shadow own it behind some 18year old that has a full time job but lives at home. They have the tax space to make the deduction.