Comment by brailsafe
4 hours ago
This seems to be, or have been, a very common scenario in Canada, which is why I completely discount when most politicians start going on about a "housing crisis" when in another breath they'll say they don't want houses to get cheaper. If it was a "crisis", one might think houses would be treated with special care instead of basically just another commodity. If a person with wealth can just buy up as many of a finite resource within, especially within the same city as they can tolerate the possession of, then nobody should have a surprised Pikachu face when they do that. If all of the food could and was bought up by a few rich people and figuratively removed from access by anyone who can't bid arbitrary amounts for it, there would and should be riots. That's how houses and condos are priced, and more supply without finite policy restrictions just mints more money for people who already have it. If it's a crisis, why is anyone allowed to own more than 1? Level it out.
In Canada, second houses and vacant houses are taxed higher than primary residences.
As far as I know, they're taxed higher in the sense that they're not exempt from capital gains, like primary residences are, but in my view it seems like that would at-most be a marginal disincentive if renters don't have much in the way of other options or protections (which vary across the country). Likewise, I'm fairly sure a mom+pop residential landlord can save on tax for any expenses related to secondary suites or secondary properties if it's considered business income. If there is very little suitable supply, it still makes sense to acquire the asset and profit off of rent, although this dynamic may be changing with increased cost of borrowing and less demand depending on market, AirBnB short-term rental restrictions, etc..
When money was free and restrictions were few, non-institutional investors seem to have capitalized aggressively on this, because the price of the property increased dramatically and also it was a near-certainty that there would be a constant stream of inflated rent a landlord could charge.
I'm happy about those tax disincentives, but they do strike me as playing around the margins; in normal economic circumstances, they should play around the margins, but that particular aspect of the economy is so embarrassingly tilted that it's really not funny anymore.
Why not both?