— Winston Churchill, 1909
— Winston Churchill, 1909
That’s in theory though, so what’s keeping this from happening in practice?
When housing bubbles burst, rental prices go up.
I really don't think it's a free market because people must live somewhere.
Further, banks only let you have one normal mortgage, so you can't buy multiple properties unless you're already wealthy.
House building companies in the UK have something like 800,000 plots that permission is granted on but yet they're not building on
Builders have an incentive to liberalize development laws and do push for upzoning. It's those who own condos who have an opposing financial interest in limiting development.
Beyond financial interests there are NIMBY and other cultural interests that seem to be decisive, like heritage preservation.
There is also bureaucratic inefficiency limiting housing development by imposing lengthy and expensive processes for getting permits and approvals.
Many neighbourhoods have zoning laws that impose height limits that prevent high-density developments, and this constrains growth in the supply of housing.
https://www.mercurynews.com/2019/04/14/opinion-california-ca... = http://archive.is/m8ZyV
Property taxes in the UK essentially don't distinguish between "nice house" and "an actual palace". A tiny bedsit pays grade A taxes, my nice flat is grade B, My mother's old house (a four bedroom cottage in a pleasant village where lots of rich people live) would be category H. There aren't any categories above H. They're charged to the occupants, so if you own a town of a hundred dwellings and let them out, the residents pay those taxes, not you. The exact mechanism has changed substantially since Winston's time (and indeed was the cause of major riots decades ago) but this general thrust has been true for generations.
It's true that rental income due to a landlord is taxable income, after expenses, but I don't see how that's relevant?
Capital Gains Taxes only kick in if you sell. If you're content to profit off ownership indefinitely you are never charged CGT.
They had a huge advantage over the council tax - and Thatcher's brief foray into a poll tax. Houses don't move, people do. The rates were on the property and were charged on rateable value which was a value distinct from market value, but not banded. People and inhabitants did not matter (at least in the 20th century - not sure about earlier).
Every government from Attlee's in 1945 onward promised to replace or reform the rates. Every one except Thatcher concluded it would be not worth doing, and far more expensive to run. All that was needed was a tax break for the little old widow stuck in the old family home after the family had left, as an exception.
Council tax is in effect a massive tax break for the wealthy, compared to domestic rates, as the highest band is an absurdly low value that catches every property worth more than £320,000 in band H. Same tax for £320k and £25m.
(From A POOR TAX COUNCIL TAX IN LONDON: TIME FOR REFORM, although the same info is on government websites).
Yet no one is complaining, demonstrating or rioting.
Actually, since rich people can evade taxes better, the part of the bag distributed to them is less taxed.
1909 was a very different tax landscape. Income tax was 3.75% and Winston Churchill was trying to raise it. I don't think CGT existed in its current form at all.
Especially seeing as royal family wasn't the greatest fan of him.