Hacker News Reader

Comment by simonh | Hacker News Reader

I don’t think the article is saying ownership is a bad thing in itself, but that the vast resources that have been poured into promoting and subsidising it have had some pretty undesirable consequences.

Here in the UK we have started imposing tax penalties on buy to rent that disincentivizes owning more than one or two rental properties. The problem with punishing institutional investors is it would take huge amounts on investment out of the housing market, just as we have a massive need for more housing. We need more houses for people to buy and more new housing available to rent. Rental properties by themselves aren’t a problem, it’s taking houses out of individual ownership and transferring them to the rental sector that’s the problem.

View on HN

They're not imposing tax penalties, they just got rid of the tax breaks.

You can no longer claim a mortgage as an 'expense' when calculating your profits.

That's not how it works for other companies, loan repayments are not classified as an expense to reduce your profits.

So now they have to pay the same tax rate as other businesses, where before they were getting a huge tax break.

Investment in the housing market drives up supply of buildings, and drives up the cost of the land underneath them. In high-cost markets, most of the cost is the land, not development on that land.

You can waive the higher taxes for very high density developments. Skyscrapers to require investors, and that is beneficial.

A progressive land tax would encourage investors to have few but high quality/density properties. The tax would be something like 2% for the individual home owner with less than 1000m^2 of land and 10% for companies owning 5000m^2 or more land.

Home prices are up because there is no supply. There's no supply because people can't afford to build houses. The issue isn't home ownership, it's the lack of it.

An LVT might work but I think it is only ethical if you advantage primary residences with a complete lack of tax.

It can’t simultaneously be true that people are paying huge sums fir houses, driving prices up, and they can’t afford to build new houses. New construction is generally much cheaper than buying an existing house. The lack of new house building is reluctance to grant planning permission due to NIMBYism.

One of the points of an LVT, among other things, is to encourage little old ladies living in 4 bedroom houses to move somewhere smaller. It’s actually a very equitable tax that reduces distortions in markets and reduces inequality. I highly encourage you to read up on it.

https://en.wikipedia.org/wiki/Land_value_tax

People aren't paying huge sums for houses or paying for new construction, property developers are.

Reply on news.ycombinator.com