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In Michigan they can apply for the rebate on property tax.
no, michigan does not charge real property taxes to renters. michigan chooses to give the renter a property tax rebate on property taxes that were levied to the owner.
no, michigan does not charge real property taxes to renters. michigan chooses to give the renter a property tax rebate on property taxes that were levied to the owner.
Again, it seems people struggle with short term vs. long term economic impacts.
In the short term, increasing the property taxes of a guy with a 10 unit apt building won't raise rents much because many of the renters are under 1 year contracts and so forth.
In the medium term, the property owner will be able to increase rents if it's a tight supply market and the renters (demand) don't have a lot of other options. However, if there is glut of rentals on the market then the property owner will be stuck eating most of the tax increase. (Demand elasticity)
In the long term, property taxes will factor into the supply of rental units because if they are unable to pass along ALL COSTS OF OPERATION and net an adequate profit there will be supply corrections until prices rise to equilibrium.
Basically, in the long run renters indirectly pay property taxes. Just like they pay for the apartments community pool, just like they pay for the super and the guys that cut the grass etc etc etc. The owner factors in all costs in arriving at the needed rent. Just because they may not be able to hike rents in the short term due to a glut of supply or whatnot doesn't mean it never works it's way into the pricing.
Again, it seems people struggle with short term vs. long term economic impacts.
speak for yourself
Quote:
In the short term, increasing the property taxes of a guy with a 10 unit apt building won't raise rents much because many of the renters are under 1 year contracts and so forth.
agreed
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In the medium term, the property owner will be able to increase rents if it's a tight supply market and the renters (demand) don't have a lot of other options. However, if there is glut of rentals on the market then the property owner will be stuck eating most of the tax increase. (Demand elasticity)
translation: in the medium term, the ability to raise rents depends on what the market will bear, like i said.
Quote:
In the long term, property taxes will factor into the supply of rental units because if they are unable to pass along ALL COSTS OF OPERATION and net an adequate profit there will be supply corrections until prices rise to equilibrium.
translation: in the long term, the ability to raise rents depends on what the market will bear, like i said.
Effective tax rates are higher because of no child-based or marriage based tax credits
At work, we often see the dreaded can you work X because your co-worker has to see their child's soccer game. Meanwhile your family is in town fo the one time that year.
Welfare programs are harder to apply for and to get in despite no increase in income.
I'm sure I am just touching the tip of the iceberg but you get the idea.
translation: in the medium term, the ability to raise rents depends on what the market will bear, like i said.
translation: in the long term, the ability to raise rents depends on what the market will bear, like i said.
Basically, we are in complete agreement I'm just not sure if you are seeing it in the last example.
See, what the market will bear in the long term depends upon supply and demand.
If you reduce profitability in the medium term as the property owner eats the increased taxes.....eventually you will reduce the long term supply of rentals. Thus, what the "market will bear" will be a higher price which will return the landlord to equilibrium profitability.
In short, higher property taxes would lower profits and eventually decrease supply and a new higher equilibrium price would result. You are absolutely correct that it will always depend upon what the market will bear. It's just that what the market will bear would eventually move if there were fewer rental properties...it would go up....thus the remaining landlords would then be passing along the costs and restoring profitability.
The opposite of this happened during the housing crisis. Rental demand exploded and prices went up in the short term. Then more rentals came on line, attracted by the higher profits.....then the prices came down.
You know how it goes, people can't stand to see others happy.
No kidding!!! Married people look at single people and reminiscence about the days they were single and didn't have to change diapers or drive some brat to school. Married people look at all of that disposable income that single people have and are jealous! They are jealous because they have to pay for their kids soccer uniform, braces, and private school while the single person gets to live it up.
If the single person wants to go out and have a good time, they don't need to make arraignments and pay a babysitter to watch their crotch fruit.
No, I don't want to see a picture of your ugly kids. No, I don't want to hear about their recital last night!
Stop Putting So Much Tax Burden on Single People!!
I'll take the taxes over the time, energy, and costs of raising kids anyday.
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