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Investors own 23.7 per cent of Ontario homes, report says
(www.theglobeandmail.com)
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this post was submitted on 25 Mar 2024
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STEAL THIS IDEA:
A 1% surcharge tax on the full assessed value of a single family home that is owned by a corporation. Each year, the tax increases at 2x the rate of inflation.
After two years, the tax applies to all individuals owning more than two single family homes (this allows for cottages and arrangements where family members own the homes where other family members live). After three years, the corporate tax increases at 3x the rate of inflation, then increases each subsequent year by a factor of +1. (4x the rate of inflation, 5x the rate of inflation, etc.).
This unravels the business of owning single-family homes as rental units over time, to avoid shocking the market -- as each home will cross over to be unprofitable at different times.
I don't think that stops a market crash, any Corp seeing that bill pass would immediately sell their properties as it's clear that it's long term not viable and that the price of housing is about to fall.
I'll cry no tears if a company sells a home to an individual at a discount. Businesses don't screw themselves by selling profitable assets. Each property has it's own schedule for when it will become a detriment to own, and they'll hold it until it approaches that point.
The main profit from the housing market comes from price speculation, that's why we are in this bubble, and why so many properties are actually unoccupied. As soon as something that seriously threatens that they will sell. Renting it out is just extra gravy.
My house is a duplex that was owned by a small corporation that rented it out before I bought it (and did some horrible horrible landlord repairs I might add). They bought in 2012 for 200K, I bought it for 650K in 2023, they claim to have charged a total of 3500 a month (IDK if they charged that amount for the whole 11yrs, but lets assume that's the case to be generous) . That means the profit from selling over this period is roughly equal to revenue from renting. If you knew the value would return to 2012 levels (which is the goal here right) in less than a decade then you'd be a fool to give up the appreciation of your property for a few more years of rental income. That's before you even factor in the direct cost of the tax.
Now maybe that shock is inevitable, and should happen anyway, but to say that this smooths the process at all is silly.
Housing cooperatives, condominiums, and other forms of social housing are corporations.
So are condo buildings, but they don't own the single family homes, they administrate the common elements and owners of private portions.
Co-ops can be converted to condos if need be, or given an exemption if they fill a niche that's advantageous.
Why convert Co-ops to condos? They are probably one of the most fair way of property co-ownership and management.
Why exempt something that's really good to begin with?
In Toronto and Montreal co-ops usually mean:
Sounds like only pros compared to for-profit corporate, government or individual ownership.
You're beginning to make me think that you don't know what the word 'exemption' means.
Yeah, I think I'm misunderstanding something in your initial statement.
My goal here is to take the profit motive out of buying and renting out residential homes. You keep adding taxes to the thing that you don't want. For example:
Cigarettes are killing people and costing billions in unnecessary health costs? Add a tax to help offset the damage that smoking causes, and provide a deterrent to continuing to smoke, and adding an incentive to stop -- it also provides funding for anti-smoking campaigns, and can subsidize programs to help people quit.
Burning gasoline and diesel are polluting the air, causing smog, and larger vehicles like SUVs are beating the shit out of roads, and hospitalizing people with lung issues? Add a tax to make it more expensive to pollute, incentivize driving less and buying smaller cars, and cover the cost of road maintenance. People who drive more pay more tax, people who drive less save more money.
Okay. I reread the thread and understand now.