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.