Foreign and non-resident owners who view houses as an investment bid up prices in local real estate markets and price out local residents.
Taxing a commodity or a behavior makes it more expensive, which thereby lowers demand, so if legislators want to see less of some behavior or resource, they should tax it. Legislators should want to see less foreign investment in single-family residential real estate because this activity prices out owner-occupants who must compete for the resource. Although lenders and loanowners may want to see higher home prices to bail them out of their foolish bubble-era loans, people who want to buy homes don't relish high prices. Current homebuyers don't like being priced out by aggressive investors, so if these investors were taxed heavily, the balance is tipped back in favor of long-term homeowners who would enjoy a lower cost of housing, and[READ MORE]