Not sure if this counts as politics or not; let me know.
One major brick in the toilet tank of the rental market is apparently investors just ‘parking their money’ in properties and leaving them vacant longterm, with an eye to selling them later at an inflated price - with rental income being not worth the hassle.
Some people have suggested a tax on vacant properties to give more incentive to rent them out.
Good idea, but I say we go one better.
- Put a hefty tax on all properties that aren’t owner-occupied.
- Give a rebate for renting them out, proportional to the percentage above or below the average rental for comparable properties.
If you charge above-average rent, you get a small rebate.
If you charge average rent, you get a medium rebate.
If you charge below-average rent, you get a large rebate. This could even exceed 100%, using the funding from the other categories.
People chasing the large rebate will drive the average down over time, ate viola, we have a race to the bottom and the consumers reap the benefits.
There’s probably a dozen reasons why this wouldn’t work, but I like it anyway.
Well, not quite.
The only subsidy would come from the taxes raised in the first place, so it would be revenue-neutral.
Raise taxes on every non-primary-residence, hand them back again if they’re rented out.
My only proposal is to skew that handing-back to favour those that rent below the market rate, dragging the market down with them.