1 house - tax breaks
2 houses - same taxes as currently for 2 houses
3+ houses - incrementally more expensive with each extra house
Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the house is empty vs if someone lives there.
Why should society be subsidizing home ownership more than they already do?
The real estate market already discriminates against people who cannot afford a deposit (an increasing proportion of people, since house prices are increasing so rapidly), and the design of North American cities encourages urban spawl which is unsustainable with current property tax rates. [1]
> and I think to promote everyone's owning a house
Why? Half of German households rent [2] and no one is wringing their hands about how people should be owning their home instead of renting.
As someone who has lived in Europe and North America, there seems to be a borderline obsession with owning a house in anglophone countries, and I don't understand why. If the rental market is sane (e.g. rent is approximately equivalent to a mortgage) then it's up to the individual if they want to purchase a home (e.g. to renovate how they see fit) or is comfortable just renting.
[1] https://www.youtube.com/watch?v=7Nw6qyyrTeI
[2] https://www.weforum.org/agenda/2021/04/global-percentage-ren...
Amusingly enough we have rent inversions in many markets right now, rental costs are below mortgage carrying costs.
Rent is gone to the owner, in exchange for one more month/two weeks/year/whatever frequency the payment is paid to the owner.
The opportunity cost between a mortgage and rent is not dollar for dollar (euro for euro, or whatever).
Because it's good for society if a large % of the population owns a home. I'm not advocating for more urban sprawl.
> "no one is wringing their hands about how people should be owning their home instead of renting"
What do you mean? People are desperate in e.g. Berlin, that they don't come here to HN and write in German about it doesn't mean that it's all rosy.
> "there seems to be a borderline obsession with owning a house in anglophone countries"
I'm a Spaniard living in Japan, not American, so not sure what you mean.
To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a host of benefits to society. It also helps economic benefits to stay in the local area. Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism.
What benefits do you see REITs provide to a community, beyond increasing your personal wealth?
Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation.
What is _not_ desirable is a large financial firm like Blackrock or JPMC siphoning off the liquidity of the housing market.
>Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism.
Yes, I largely agree with Georgism, but I don't think incentivizing rich people to buy the largest home possible is within the spirit of Georgism. You'd also run into the problem of people pretending their apartment complex is really just a large mansion. They'd likely spend money on renovations that make the units less desirable to make it classify as a single home.
>What benefits do you see REITs provide to a community, beyond increasing your personal wealth?
What benefit does my landlord provide that a REIT doesn't? REITs allow me to be invested in real estate without exposing me to too much risk associated with a single location.
>Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation.
No REIT can exist with 10 homes. That's way too much money proportionally spent on administrating it.
Business and investment models can adjust; management companies would fill the investment gap for REITs. So rather than direct ownership, shareholders can instead invest in publicly traded property management firms -- arguably what a REIT should do anyhow.
With fewer units, landlords have more incentive to keep properties in working order to keep up liquidity should they choose to sell. This helps offset the tax incentive to let properties go to ruin.
I don't follow your assertion that increasing taxes on larger ownerships would result in rich people buying the biggest property they could possibly afford. People do that anyway?
Residential REITs and other institutional investors finance the construction of new apartment complexes. I don't think a landlord is that much more incentivized to take care of their property any more than a property manager who gets hired by the REIT or institution. Even if small landlords are better than REITs, I don't think that people who own 2-10 homes are necessarily any more productive landowners than institutional investors. There are plenty of people in the former category besides landlords: for example, someone buys a seasonal home that does nothing for most of the year or inherited property and are just letting it sit vacant.
>I don't follow your assertion that increasing taxes on larger ownerships would result in rich people buying the biggest property they could possibly afford. People do that anyway?
The point is to disincentivize this behavior? Same reason why you would increase property taxes/LVT in the first place. I'm not saying that institutional investing in property is great. I'm saying that there are worse behaviors that should also be punished. This is a particularly big problem in vacation destinations where the housing supply gets swallowed by non-residents.