Alright, Tax Wealth, Not Work (TWNW). Let’s say the wealth tax got implemented at 2% on wealth over 10 million. I’m unclear on whether it would increase single home ownership and reduce the number of available rentals and thus make it even more difficult to find living space. Or would the tax revenues from it allow for the construction of more community housing?
The idea is to make the wealthy sell some of their assets. Thus driving the price of those assets down. If people horde fewer houses, the market of buyers shrinks and prices fall.
Now a 2% tax on certain assets won’t solve everything. But its a good start. There will need to be a number of loopholes closed and other taxes targeting the super wealthy, in order to make a real difference.
But who will they be selling to? I imagine it will be people who actually want to live in their homes, not just rent them out. Wouldn’t that reduce the number of available homes people can rent?
Is my logic it would reduce the number of homes available for rent. More people would be able to own. Because more homes in the market would be available. But people would be buying them to live in them. We literally can’t build homes fast enough. Every time there’s a downturn in the market building of homes slows down. And that puts us even further behind.
My concern was that not everybody can afford to buy a house, but back in the day people on a receptionist income could buy a house, so if we go back to those days, house ownership would rise again. And as others made me realise, the stuff standing empty for investment would be sold to be used again and outsized homes could be sold to be repurposed as social housing or jousing outright.
That’s not a bad point. Many options exist to offload property though, including bulldozing a mansion on 10acres that no one is buying and turning it into a housing sub division
Good point! Yes, larger estates could be sold to be used for housing multiple people or indeed for building new housing. Thank you
Maybe. Mostly it’ll drive down the rent, since the homes are worth less.
If it’s a tax on wealth, what difference does it make if you own an asset or its value in cash?
By the way: sales may reduce the stock of properties for rent driving the prices up.
Not necessity. Since housing will be cheaper to buy, some will do that instead of rent. So the market of renters will be smaller, keeping rental prices in check.
In the Netherlands they tried that gamble and it didn’t work well. The stock for rent decreased with more houses sold, the prices kept growing as usual, and effectively more people faced higher rentals.
Maybe fewer people faced higher rents since more bought instead. But that would depend on the details of a specific market.
As I said the tax itself won’t fix everything. If rents get too high you need to adapt zoning to encourage more duplex and multifamily homes.
I think that the implication was that they would have to sell in order to come up with the cash to pay the tax?