To think people who own more than 3 properties should have a special tax applied to them?

[Calltheguards]

I'm just thinking with the housing crisis, should people really own more than 3 properties? I would assume it's a property portfolio and used to exploit renters. AIBU to think there should be a special tax applied to property owners who own more than 3 properties? Maybe tax them at a really high rate to discourage people from hoarding property.

@Miljah I appreciate you clarifying that. I only mentioned it because a friend of mine got a shared ownership and they explained it as "It's a way for low income people to purchase a house" and said she slowly pays bigger shared until she can afford to buy it outright.

I am only joining the discussion but some of you and the OP are really unnecessarily kind.

really unnecessarily kind This meant to say unnecessarily unkind, guess i'm showing how Thick and "full of fallacy" i am now, eh?

Actually, I have less of a problem with big, professional companies being LLs; doing a regulated, professional job, rather than, as someone mentioned upthread, the 'single BTL' 'ave a go LL who may well not know what they're doing.

I think the one or two BTL owners should be hit hardest.

And that private renting laws should be far more like those in say Germany where tenants have way more rights and security of tenure, often decades. Also, I believe large amounts of German rental housing stock is owned by big pension funds, not individuals out to make cash by buying someone else's potential FTH- and renting it 'back' to them at a price higher than the mortgage.

It's immoral and we should not be allowed to do so.

I've really got my fingers crossed for a massive house price crash. People who have a house and live in it can continue to do so (even if in negative equity) and all buy to let landlords out of business. Young people able to afford a mortgage when now they can't.

So you're not bothered about the tens/hundreds of thousands of people who'd lose their jobs, i.e. estate agents, mortgage brokers, builders, trades, builders merchants, manufacturers etc as house builders would stop building new houses and people would stop moving. Yeah, what a good idea!!

GreytExpectations

I didn't call you thick

I offered you the option of admitting that you knew nothing about the shared ownership schemes or that you were thick.

You seem to have chosen both.

Do you all know why many other countries have to have better rent set up? Because it's virtually impossible to buy.
I have friends and family in Central European country. House prices rose, but unlike in UK where FTBs have the amazing benefit of 5% deposit, they have to have AT LEAST 20% and number of 20% mortgages is actually limited. I bought my house in large city in NW not only cheaper than what similar property costs in there in similar sized city, but also with less than a quarter of deposit they need. And wages are FAR from UK standard.

Grass is not always greener, sometimes it just looks greener because you are looking at it from a certain angle.

Owners of multiple properties already have significantly greater tax burdens than those who own one property, or rent. Imagine how many properties would have long fallen into disrepair, allowing real environmental degradation, should people not be investing in them... and then there would be even fewer houses and an even larger housing crisis.

If you are talking about those who own multiple properties for their own use, then these are also subject to additional taxation. For some people, like my family, this is a necessity for work reasons - not because we are 'hoarding properties.' We move between countries to complete work obligations, and pay substantial council/municipality taxes as a result. As a result of our careers and businesses, we also pay significant income tax to multiple governments.

We have rent to own contracts in the US, but they're not terribly common.

www.investopedia.com/updates/rent-to-own-homes/

The contract simply allows the renter to buy the house at a set price at the end of the lease. In some cases a percentage of the rent is applied to the purchase price, but that will cause the either the rent to go up or the purchase price to go up. There is no magical free house for the renter at the end of the lease.

Grey in what was was I unkind??

I explained why I think government schemes like Shared Ownership only exist to keep house prices artificially high, to soother their natural constituents, the wealthy and/or elderly home owner.

@BoneyBackJefferson what exactly have I said to you that caused you to be so rude to me? Of course I'm not suggesting i'm thick! Good god, are you always this mean for no reason?

I even explained (if you bothered to read it) that I was basing my question (yes, I didn't know much about it which is why i fucking asked!) on a friend who bought a shared ownership and they way they explained it to me.

@MissConductUS they tried same in here. I saw them 4 years ago or so, but it dissapeared. I guess it didn't work here?

@Miljah
Grey in what was was I unkind??

Apologies, I wasn't referring to you, I was referring to OP and the other poster I've responded to. If you read, I actually thanked you for clarifying.

sergei "Owners of multiple properties already have significantly greater tax burdens than those who own one property, or rent. Imagine how many properties would have long fallen into disrepair, allowing real environmental degradation, should people not be investing in them... and then there would be even fewer houses and an even larger housing crisis."

Um- surely the people who had bought them to live in would be investing in them to prevent them falling down?

You make BTL sound like a social service!!

As for your personal circumstances, I'm sure you know they do not reflect the norm, where someone, like me (tho I don't because as already stated, I think it's immoral), uses the unearned equity they've built up in their home to snap up what could be someone else's FTB house, in order to rent it 'back' at a cost higher than their mortgage on that property would be.

Grey You have to admit that thanking me for my 'clarification' followed by calling me 'unnecessarily unkind' did rather sound like your thanks were sarcastic!

Miljah Yes, I do see that now I was more having a moan about how nasty people on here are being.

Either way, I think this hatred of landlords is ridiculous.

I also agree with PP that people are sometimes very naive about what a property crash would actually mean. There certainly wouldn't suddenly be loads of cheap properties available to buy. The market would stagnate with people preferring to stay in their home (instead of downsizing/upgrading) or rent their home out instead of selling. There would also be fewer newer properties built as they'd be less profitable.

@Miljah Well, if the property wasn't allowed to be purchased by investors - that would sink the economy, which would result in the vast majority of people being unable/unwilling to purchase the property due to their economic situation regardless of the housing price, either due to capital or fear of the uncertainty in the economy. They almost certainly couldn't afford to renovate the property in that circumstance. Thus, the houses would fall into disrepair either way. I also think there is something rather dreadful about wishing on an economic crisis, but other posters have pointed that out to you.

I'd argue that actually amongst people who own properties in multiple countries, we're the normal sort of family - and we'd be the ones impacted by such a law, so... well we would be the norm... You can't include those not in the group to determine what the average is.

GreytExpectations

There was no mention of a friend in the post that I quoted you on, that came later, even then you have not said how she explained anything (in a reply to another poster).

But here is how it works.

you buy X% of the property.
You pay rent (at the full price) on the remaining Y% of the property.

But the fun doesn't stop there.
you are responsible for 100% of the cost of repairs to everything in the property.

You can continue to buy back %s of the property (these are sometimes set as % chunks so not just 1% here and there.

And selling on is a fucking nightmare.

So its just one big con.

@TheAverageJuror Rent to buy doesn't generally work here either, which is why it's relatively rare. Leases are seldom more than 2-3 years, and at the end, most renters aren't in any better shape to buy than they were at the beginning. And if they don't buy at the end of the lease than anything extra they've paid is forfeit.

I think OP is picturing more of situation where if someone has been renting continuously for more than X number of years the ownership of the property just automatically transfers to them, regardless of what their contract with the owner of the property says. I don't think that would hold up legally, at least in the US, and would certainly cause a lot of rental properties to come off the market.

I think OP is picturing more of situation where if someone has been renting continuously for more than X number of years the ownership of the property just automatically transfers to them, regardless of what their contract with the owner of the property says. I don't think that would hold up legally, at least in the US, and would certainly cause a lot of rental properties to come off the market.
Agreed. Plus OP forgot to take into an account costs of conveyancing, mortgage fees, repairs etc landlord did, deposit and the fact that the original owner also had to have certain income to secure the mortgage. Basically all the hard parts.

Sergei "Well, if the property wasn't allowed to be purchased by investors - that would sink the economy, which would result in the vast majority of people being unable/unwilling to purchase the property due to their economic situation regardless of the housing price, either due to capital or fear of the uncertainty in the economy. They almost certainly couldn't afford to renovate the property in that circumstance. Thus, the houses would fall into disrepair either way. I also think there is something rather dreadful about wishing on an economic crisis, but other posters have pointed that out to you."

Sorry, Sergei, but that makes no sense! If an investor wasn't buying it, a homeowner occupier would!

Why do you think there is 'a vast majority of people being unable or unwilling to purchase that property'? There are many, many people in private renters who are more than able to pay what should be their mortgage repayments on the house they live in, but instead are being made to pay out more in rent, thus preventing them from saving the deposit.

Why? Because you used your equity in a property you bought, possibly via the same good fortune I outlined earlier in my case, to snap up that property.

Where have I said I 'wish an economic crisis'? I have said that the government should stop artificially propping up house prices. If you think that will bring about a financial crisis, you've laid your own argument bare; namely conceding that it's just this government's intervention that is keeping the whole swaying, teetering edifice of madly over-priced housing (and the BTL phenomenon) upright. Not a great way to run an economy.

'essentially a parasite'
Thanks very much.
Some of these people have worked hard to be where they are. They are taxed on the property and on earning from the property.
My family own a home, a holiday rental, and a business with accommodation above.
We are early 30s and don't come from well off families. We also rented for years.
We will probably expand on this.
We don't exploit our tenants.
We chose to put our hard earned, and hard saved, money into property and make it work for us.
We have also had to spend tens of thousands over the years when tenants trash the property.
OP if you want to own a house, or a few houses, there is nothing stopping you.

sergei - um... The average 'ave a go LL in this country is how I described upthread. Someone who is using the equity in their own home to buy another to rent out; maybe 2. They are not international business people with multiple rentals in multiple countries, as you appear to be.

I gather you don't fit this model.

And you make snapping up property in order to rent it out sound like you think your performing a social service! Otherwise, obviously the place would fall down.

Well done you.

I'm sure we're all grateful.

To a poster upthread: I don't necessarily 'hate' landlords. I think the choice they have made is immoral, but I get that it's legal.

I hate the system that not only allows it, but positively encourages it.

witsend "OP if you want to own a house, or a few houses, there is nothing stopping you."

There should be.

@Milajah - From your response I can only assume you're a fervent supporter of the Austrian School, with little emphasis on the short to medium term prosperity of families - and you are certainly arguing for the imminent collapse of the economy, and the subsequent crisis that would hit the most vulnerable hardest of all - it's not just housing impacted if the economy falls into a structural recession. This is the same argument for the UK going over the fiscal cliff, it's not a viable reality.

What I said made absolute sense, housing markets slow and stagnate in times of economic uncertainty. Many people on this thread have attested to this, the data represents this, and if you like I can post some papers that prove this. What you said, however, doesn't make sense: if the issue is with the deposits demanded, then reforms to the mortgage industry seem more appropriate than what is suggested on this thread... luckily, what is being suggested by the OP will never happen.