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.

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    $\begingroup$ 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. $\endgroup$ – Giskard Aug 14 '17 at 10:55
  • $\begingroup$ 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. $\endgroup$ – giftnuss Aug 14 '17 at 11:39
  • $\begingroup$ 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. $\endgroup$ – Giskard Aug 14 '17 at 12:12
  • $\begingroup$ 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. $\endgroup$ – Kitsune Cavalry Aug 14 '17 at 15:08
  • $\begingroup$ 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. $\endgroup$ – Alecos Papadopoulos Aug 15 '17 at 19:45

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.

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  • $\begingroup$ 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. $\endgroup$ – giftnuss Aug 15 '17 at 18:54
  • $\begingroup$ 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. $\endgroup$ – ssn Aug 15 '17 at 19:04
  • $\begingroup$ 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. $\endgroup$ – Kitsune Cavalry Aug 15 '17 at 20:01

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