The Rise of Vacancy Taxes
Tom Moore opened the conversation by mentioning the idea of a vacancy tax, which has already been implemented in several large cities. San Francisco, for example, has a version of vacancy tax for commercial real estate and storefronts. Funnily enough, this idea did not actually originate in the US, but first took hold in Vancouver, BC in Canada.
The purpose of these taxes is to target homes that remain empty for long periods; however, Tom questioned whether such policies actually help or just add complexity for property owners.
The “Taylor Swift Tax” in Rhode Island
Paul Locatelli brought up a new term making headlines: the “Taylor Swift tax.” He explained that in Rhode Island, homeowners who own properties valued over one million dollars that are not their primary residence are now being hit with a significant additional tax.
This type of measure, Paul said, shows how states are increasingly finding new ways to target high-value or non-resident properties.
Hawaii’s Complicated Tax Structure
When the discussion turned to Hawaii, David Moore explained that the state’s property tax system has become especially complicated. He said, “They have three different taxes with property taxes. They’re a mess.”
Paul had asked whether Hawaii was planning a non-resident tax, and David confirmed that such measures already exist and contribute to the overall confusion in Hawaii’s property market.
Changing Rules for Property Owners
David Moore reflected on how policies like mansion taxes, vacancy taxes, and non-resident property taxes are spreading. He noted that Los Angeles now has a mansion tax, further evidence of this national trend.
David summed up the issue by saying that while it used to be that your real estate was your business, today it doesn’t always feel that way. Increasingly, property ownership comes with new conditions and costs that can limit what owners are allowed to do.
Understanding What’s Ahead
From Vancouver to San Francisco, Rhode Island, and Hawaii, property owners are facing new taxes and restrictions that challenge traditional ideas of ownership. As David Moore, Tom Moore, and Paul Locatelli discussed, the question remains: if it’s your real estate, should you still have the right to do what you want with it?
If you want to better understand how new tax policies could affect your investments or upcoming 1031 Exchange, reach out to the team at Equity Advantage. Their decades of experience can help you navigate ever-changing markets and be confident in all your investment decisions.
The Guys With All The Answers…
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.
