There’s a bit in Kim Stanley Robinson’s New York 2140 where the empty investment properties of the ultra-rich are compared to giant gold bars, taking up space in our cities that people could live in. Its becoming an increasing problem. It was nakedly exposed in London after the Grenfell fire, when the residents of the apartment were left homeless despite being surrounded by empty properties which could easily house them. And with Auckland’s property bubble, it has become a problem here as well. So how do we deal with it? Simple: we tax it:
How to persuade the world’s wealthiest people not to leave properties empty is a conundrum that is not confined to London – other major cities around the globe have also been grappling with the problem of buy-to-leave.
Higher rates of tax for owners and buyers seem to be the preferred choice. In Vancouver, where an estimated 20,000 properties were lying empty all or much of the year, a new tax on empty homes was introduced at the start of this year. The city is now charging 1% of the value of any property left empty for at least six months a year. Owners must declare that this is the case, or face fines of up to $10,000 a day if they do not and are found out. On a property worth £500,000 the annual bill is £5,000 and as the property rises in value, so does the penalty for leaving it unused.
In the days running up to the first taxes kicking in, six months into the year, local media reported that homeowners were caught in a “scramble to rent”, or considering selling up to avoid the tax. The response suggests that the threat of taxation was having the desired effect.
Which is what we want: we want houses to be homes for people to live in, not gold bars for the rich. If they want to stockpile wealth, they can do it in a way which doesn’t fuck up the rest of our lives, thanks.
These are the real criminals – hogging housing desperately needed for those on low incomes, working or not. And these ghost house criminals hide behind the letter of the law, while many take aim at beneficiaries as the scourge of society.
This situation of housing poverty, and income and asset inequalities shows what a moral, social, and economic failure our current democratic and “neoliberal” capitalist system truly is.
The latest story of mother killed in car crash and children being told to leave the state house is a shocking reflection of NZ society where balancing the books is more important than humanity in caring for people.
Not only that, but the cost in the future of housing low income people will rocket for the government and future tax payers under National’s state house sell offs.
Now in the UK the government is facing an absolute nightmare when the short sighted decision of selling off their MoD houses under the Tories 20 years ago is going to come home to roost when they will find their defence workers can’t afford to rent the privately owned houses and have to leave the defence force and the councils are bidding against each other for social housing because there is so much need for them.https://www.theguardian.com/news/2017/apr/25/mod-privatise-military-housing-disaster-guy-hands
Yes but they’re not even ‘balancing the books’ are they.
They’re piling up debt whilst transferring wealth to the top end, socialising losses and privatising profit.
+111
And destroying our society by doing so.
We cannot afford the rich.
Pretty easy to get around it though by just having a family or friend or domestic staff pop in there to live before the 6 months.
I’d prefer a 1% tax on overseas residents on assets here and better still stop selling our land to overseas residents and corporations – we already have enough of our land sold off. Look at China, all land owed by government. Having a mid point of only NZ residents being able to own land here would stop ‘gold bars’ investments.
remove any tax incentive to keep properties – residential and commercial – empty.
maybe this is something Top could write a policy about, after all their chief economist is on record for keeping properties empty to ‘save the carpet’.
Not practically enforceable and the wrong approach IMO as property’s can be empty for perfectly valid reasons, especially commercial ones.
You stop it at source with rules on who can own what and have a CGT. Don’t expect any change from aptly named Opportunists party.
Oz has done this for decades and it helps to keep somewhat of a lid on it but you can see over there that the sheer force of demand and endless foreign cash still makes it an unhealthy upward spiral for the first home buyers to enter.
No surprises national spurned both ownership rules and a CGT as they wanted the sugar rush to mask their hollowing out of the economy.
small story
shop for lease 20.000 p/a plus outgoings – taupo
offered a bit less cause frankly the place needs fixing
offer refused
shop now for lease on trade me for 26.000 p/a plus outgoings
it still needs fixing, its still empty, but now full of grafity
commercial for lease 32.000 p/a plus outgoings – whakamaru
no offers in two years
now for lease 28.000 p/a plus outgoings
no offers in one year
still empty
my ex landlord in akl, two days before chirstmas comes in with a new lease, rent increased by 100%. shop has now been empty by almost a year.
no if the ‘market’ regulates the price then somewhere something does not add up.
fact is the ghost homes keep people homeless and the ghost commercial spaces keep people out of their own businesses and sometimes out of a job.
so either the market fixes, or the market is fixed. you decide
Also i don’t argue for a CGT, i argue for the removal of any ‘tax incentive’ i .e write off a loss of a commercial property / residential property against income. Cause that is what makes keeping properties empty so attractive. And i don’t expect anything from a party that is run by a tax avoider.
If a commercial property is un let for long periods it actually drives down business for the other shops/commercial as it starts looking like an eyesore.
I’m not for CGT, either because so many ways to avoid it if you are rich enough, and if you are rich enough not to sell, then you don’t pay any taxes! Yep, those leases empty for over a year should have a tax put on them. So many places in Auckland have been demolished and then just stand empty as eyesores in the community where a thriving business once stood.
Rent needs to reflect the value of the property.
as an example in France the rent for a commercial property is based on the ‘fond de commerce’ or in english what the last business made. the more money the buisness made the higher the rent and the resell value of the business.
here in NZ i have no idea what rents for commercial properties are based on.
it makes no sense that rent for a commercial property in Tokora is the same as is Auckland, but it is. lol
and we wonder why our rural towns are dying. they are being killed by greed.