<p>Why do you think that additional taxes on more expensive apartments (progressive taxes) would lead to lowering the prices and offering them cheaper than market dictates? </p>

<p>Adding taxes on top would just make these apartments even more expensive for the consumer, since the owner will push down the additional cost to the consumer rather than take a haircut. Especially if these apartments are laying around empty anyway. </p>

<p>If I am willing to sell product A for say 1.000$ but there are no buyers - will an increase in the tax help me sell it? 
If you on the other hand gave me a tax discount, I might want to sell it cheaper, since I may be left with the same after-tax profit. </p>

CC BY-SA 3.0
2017-08-15T18:54:44.117Z
No, I don't think - I ask if it is a valid solution. I only think that the current form of taxation does lead to higher prices.
giftnuss
CC BY-SA 3.0
2017-08-15T19:04:25.960Z
I don't know the housing market I Germany - but obviously taxes induces higher prices than if no taxes.  However I doubt that the tax system is the main driver for expensive housing. Currently, labor is expensive, hence building new apartments is expensive, and the owner needs a certain return for his investment, therefore rent will become more expensive. The owner will probably rather have an empty place for a period of time, than rent it out indefinitely too cheap - ending up costing him more money.
ssn
CC BY-SA 3.0
2017-08-15T20:01:19.190Z
I dont think the author is asking about adding an additional tax. I think the question is about replacing the currwnt form of taxation with a different one.
Kitsune Cavalry
CC BY-SA 3.0
2017-08-15T18:31:18.140Z
2017-08-15T18:31:18.140Z
ssn
<p>The background of this question is: In Germany rental income is generally taxed the same as regular business income. In some cities, there seem to be housing shortages across different incomes.
Are there countries where rental income is taxed by square meter/footage? Could it provide housing relief?</p>

<p>In the following tables there are three models of taxation shown. The first tries to model the current situation where the taxation is related to the gained income and not to the size and price of a flat. The following tables try to show the situation when taxation is based on price per m².</p>

<p><a href="https://i.sstatic.net/I9PxO.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/I9PxO.png" alt="enter image description here"></a></p>

CC BY-SA 3.0
2017-08-14T10:55:21.893Z
How does the current tax not depend on the price per square meter? It is a value added tax, so it is proportional to it.
Giskard
CC BY-SA 3.0
2017-08-14T11:39:43.607Z
Not in reality, because it could create the effect that owning flates with higher prices where some are empty is more profitable as having all flats rented to lower prices.
giftnuss
CC BY-SA 3.0
2017-08-14T12:12:14.160Z
I have no clue why you are writing this. This has nothing to do with the tax being proportional. As it stands, I find this question unclear.
Giskard
CC BY-SA 3.0
2017-08-14T15:08:54.863Z
I've edited the question to make it more tangible, but I don't really understand your response to denesp either. Beyond that, I feel like the question is too broad.
Kitsune Cavalry
CC BY-SA 3.0
2017-08-15T19:45:35.663Z
You need to at least describe what is the tax scheme on "regular business income" and also how the "tax per size/price" would differ, as you imagine it.
Alecos Papadopoulos
<taxation><housing>
Could a tax on rental income that depends on price per square meter induce more housing with lower rents?
giftnuss
# Could a tax on rental income that depends on price per square meter induce more housing with lower rents?

(Asked by: username_0 on 2017-08-14)

The background of this question is: In Germany rental income is generally taxed the same as regular business income. In some cities, there seem to be housing shortages across different incomes.
Are there countries where rental income is taxed by square meter/footage? Could it provide housing relief?

In the following tables there are three models of taxation shown. The first tries to model the current situation where the taxation is related to the gained income and not to the size and price of a flat. The following tables try to show the situation when taxation is based on price per m².

[![enter image description here](https://i.sstatic.net/I9PxO.png)](https://i.sstatic.net/I9PxO.png)

**Tags:** taxation, housing

> **Comments:**
> **username_1**: How does the current tax not depend on the price per square meter? It is a value added tax, so it is proportional to it.  
> **username_0**: Not in reality, because it could create the effect that owning flates with higher prices where some are empty is more profitable as having all flats rented to lower prices.  
> **username_1**: I have no clue why you are writing this. This has nothing to do with the tax being proportional. As it stands, I find this question unclear.  
> **username_2**: I've edited the question to make it more tangible, but I don't really understand your response to denesp either. Beyond that, I feel like the question is too broad.  
> **username_3**: You need to at least describe what is the tax scheme on "regular business income" and also how the "tax per size/price" would differ, as you imagine it.  

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## 1 answers

### Answer by username_4 on 2017-08-15. Score: 1

Why do you think that additional taxes on more expensive apartments (progressive taxes) would lead to lowering the prices and offering them cheaper than market dictates?

Adding taxes on top would just make these apartments even more expensive for the consumer, since the owner will push down the additional cost to the consumer rather than take a haircut. Especially if these apartments are laying around empty anyway.

If I am willing to sell product A for say 1.000$ but there are no buyers - will an increase in the tax help me sell it?
If you on the other hand gave me a tax discount, I might want to sell it cheaper, since I may be left with the same after-tax profit.

> **Comments:**
> **username_0**: No, I don't think - I ask if it is a valid solution. I only think that the current form of taxation does lead to higher prices.  
> **username_4**: I don't know the housing market I Germany - but obviously taxes induces higher prices than if no taxes.  However I doubt that the tax system is the main driver for expensive housing. Currently, labor is expensive, hence building new apartments is expensive, and the owner needs a certain return for his investment, therefore rent will become more expensive. The owner will probably rather have an empty place for a period of time, than rent it out indefinitely too cheap - ending up costing him more money.  
> **username_2**: I dont think the author is asking about adding an additional tax. I think the question is about replacing the currwnt form of taxation with a different one.  

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