Killer Arguments Against LVT, Not (243)

Kj reminds us that we get the same crap in Norway:

In the proposed state budget for 2013, the government wants to increase the tax on secondary residences. In the assessment of the wealth tax (top rate 1.1 %) secondary residential and commercial property has been valued lower than other investments. For the 2013 budget, Government is proposing to increase the assessment from 40 to 50% of market value.

Peter Batta, President of the National Homeowners' Association, said the proposal to increase the assesment value is an anti-social proposal as far as tenants are concerned. "If the government increases the assessed values of secondary residences from 40 to 50 percent, the effect will be to increase taxes for those who have extra housing for rent. At the same time, the consequence is that the profitability of letting will fall and many will sell their rental property (1)" Batta said in a statement.

The National Homeowners' Association estimates that more than five percent of the housing market is secondary residences and that between 20,000 and 30,000 units of rental housing will disappear (2) from the rental market as a result of the tax increase in the state budget.

"In addition, tenants will be left with higher rents, since all costs over time will be passed on to the tenant (3). In other words, a very anti-social proposal for anyone who is in the rental market," says Peter Batta.

Classic KLN!

(1) and (3) cancel each other out: if they can pass on the costs under (3), then profitability would be the same as now. But no, according to (1) profitability will fall, and under (2) 20,000 to 30,000 units of rental housing will not be sold but will just disappear!

Presumably they would be put on the market, but the effects of the release of 20,000 to 30,000 units is not something that benefits the paying members of the NHA, even though it will benefit future homeowners, which can't be a good thing can it?

Also worthy of note: a 10% increase in the assessed value a £150K apartment means a £165 increase in taxes, hardly anything in the greater scheme of things.