The petition demands a right to reuse for existing buildings based on three key pillars: (I) tax reductions for renovation works and reused materials, (II) fair rules to assess both potentials and risks of existing buildings, and (III) new values for the embedded CO2 in existing structures.
Here is the organization’s website: https://www.houseeurope.eu/
The only thing I don’t support with this petition is the VAT exemptions for building renovations as companies are unlikely to pass these reductions on to consumer prices. Many investigations have shown that the prices can even be higher in the long-term as companies increase prices once the VAT exemption is over, passing the increase on to consumers.
The intentions go in the right direction, though, as avoiding the use of new materials in buildings can help to reduce greenhouse gas emissions.
So this is not about ‘landlords vs renters’, but an environmental issue that is absolutely necessary.
The European Environmental Agency published a briefing a couple of years ago for those who want to dig deeper into that.
That’s been policy here in Germany for well over a decade. Doesn’t seem like something that requires steering on EU level.
Err… doesn’t incentivizing via tax reduction mean we are all gonna pay the bill for the building owners?
If anything, we should disincentivize (via fees or increased property tax) those who don’t properly renovate their buildings. The same goes for demolitions if you think they are evil.
So making people pay who currently can’t afford a renovation? That way you’ll get even fewer renovations and raise inequality in the process.
Does it say somwhere the tax cuts are for low income oeners only? If you can’t afford to own a house (or car, or anything else) you’ll have to sell it.
Does it say somwhere the tax cuts are for low income oeners only?
Not that I know of, but that is beside the point as it’s not what you originally suggested. Restricting the tax cuts to low-income people would be a much more reasonable idea.
If you can’t afford to own a house (or car, or anything else) you’ll have to sell it.
From what you suggested, you want to actively price people out of their houses. So non-rich people in rural areas etc won’t be able to keep their homes anymore and have to rent. Their houses will either get bought by rich people or real estate companies who can afford to do the renovations or they’ll be left abandoned. People who are already rich can afford the renovations and won’t be affected by the penalties. Is that really a desirable outcome to you?
To give a concrete example, a policy like you suggested might make my mom homeless. She’s not rich, my parents were both social workers and paying off the house took decades. The house is from the 1920s, so it needs a lot of renovations to be up to modern standards. Currently, she can slowly save up some money and do them one at a time. You’d place an additional financial burden on her, which would make her unable to save money for the renovations and possibly cause her to lose her house.
From what you suggested, you want to actively price people out of their houses.
That conclusion exists in your mind, not mine.
When I say “If you can’t afford to own [something] you’ll have to sell it” I just mean that “If you can’t afford to own something you’ll have to sell it”, which is a general principle in our society, and specifically a consequence of how people are not expected to expend their own resources to preserve other’s private properties the same way they are expected to expend resources to preserve other’s lives (I know full well that this obligation is not legally enforced everywhere -eg. lookup duty to rescue- I do believe it is felt everywhere as a moral duty).
So non-rich people in rural areas etc won’t be able to keep their homes anymore and have to rent. Their houses will either get bought by rich people or real estate companies who can afford to do the renovations or they’ll be left abandoned.
Again, in your mind, not mine.
I explicitly said “we should disincentivize (via fees or increased property tax) those who don’t properly renovate their buildings”, so… such people would just have to pay fees or more taxes (realistically and depending on fee/tax amount, they would take a loan instead or do the exact same thing they would have to do if renovations were needed for whatever other external reason such as aging of the building, fire, flood, etc.).
People who are already rich can afford the renovations and won’t be affected by the penalties.
This is a general issue, not specific to this topic. Anyway the solution to penalties not being as hard on rich people as they are on poor ones cannot be that we use taxpayer money to
Is that really a desirable outcome to you?
I think I’ve shown that what you label an outcome of my proposal is such only in your mind.
To give a concrete example, a policy like you suggested might make my mom homeless.
That would be reason enough for me to be adamantly opposed, were I in your shoes.
For a case study on how incentives actually go, lookup “Superbonus 110%” in Italy:
- prices skyrocket (both prices of building materials, and prices of construction work)
- construction companies are overflown and have to choose which customers to prioritize. Needless to say, they prioritize the bigger ones (ie. rich people with lots of buildings and real estate companies) and the smaller owners/condos simply cannot find anyone to work on their building
- worksites open quickly, but construction goes slowly (because of lack of materials, because construction companies try to parallelize as much as possible, and because you get money as you go rather than only when you finish)
- the chances to get a worksite inspections are even fewer than usual, because of the huge number of worksites. Together with the the exceptional demand, this leads to an increase in illegal labour and in worse safety conditions (and work conditions in general) at worksites
- fraud is rampant
- countries end up with HUGE amount of extra debt beyond what is initially calculated (because costs always exceed initial calculations, but also because in this specific case you just cannot foresee the effects of construction material prices and how many inefficiencies the whole thing will produce)
In the case of Italy, they initially thought incentives would cost some 35B. In 2024 they were calculated at around 160B, and they will probably sum up to even more.
You can tax as usual and have some renovations, or tax less and have more renovations.
You don’t seem to get my point. How much money would someone who rents their house (or someone who owns it but doesn’t own more) pay? How much tax cut would they get? What about someone who owns three villas and six airbnb apartments?
I get it: you would bind the tax discount to individual wealth.
What if I’d tell you that a minimal renovation would eat the earnings from a rented house for 5-10 years and be therefore completely anti economic for the landlord?
Nope.
I’m saying that a tax cut is just a different form of taxpayer money and asking why, in the first place, we should want to use taxpayer money to increase the value of the assets of people (or companies) who own buildings.
What if I’d tell you that a minimal renovation would eat the earnings from a rented house for 5-10 years and be therefore completely anti economic for the landlord?
I would really feel for that poor-poor landlord who would no longer be able to live off the rent they are paid every month (and who surely would not just increase such rent), but I still wouldn’t want to use my money for improving their building.
PS: income is not a measure of wealth. One can live off their wealth (often inherited) and still generate little or no income.
I’m afraid you know little about the real estate business, and are blinded by the assumption that landlords are all just rich bastards.
Your PS is correct if you, like Elon Musk, are able to live borrowing money using your wealth as a collateral. For most of wealthy people that’s impossible.
Did I ever say landlords are a bunch of rich bastards? This is twice you put words into my mouth. IDK if it’s a way of thinking or a deliberate debate technique, but please stop: it’s really irritating.
Also, since “you are afraid I know little about the real estate business”, would you be so kind as to enlighten me with your wisdom? or should I defer to your authority and just trust you? (BTW: we are not talking about how things work - we are talking about how we think they should work. I know full well that building and renovations -among other activities- are often incentivized. That has much more to do with politics than ethics).
I would really feel for that poor-poor landlord who would no longer be able to live off the rent they are paid every month
Did I ever say landlords are a bunch of rich bastards? This is twice you put words into my mouth.
Mind your tone if you don’t want to be misunderstood.
would you be so kind as to enlighten me with your wisdom?
Sure. Real world example:
- Apartment rented for €700/month.
- Tax on the rent around 30%.
- Property tax €1.500.
- Expenses from the building about €1.500/year.
- Fees for the agency 5%/year.
Total: €2.880/year. To that, subtract the fees for the agency and occasional maintenance that can range from €100 to a few thousands per year. Yes, it’s possible to go negative.
A minimal renovation to improve the energy class (like changing the windows) is in the €10-15.000 range that means that no landlord will find it economically reasonable. A lack of renovation of rented properties means that who lives in them (including poor working class) will have higher energy bills and lower quality overall. When an apartment becomes too old to be rented out, it is sold and typically stops to be rented out limiting the number of affordable homes for the low income class.
So, before complaining because a tax cut may help “poor-poor landlords”, remember that without them there will be no renovations (so 0 taxes instead of a positive discounted amount) and low income families will not see improvements in their places very easily.
To me it feels like no additional law is required - those with bad buildings will pay more for heating. If they carry those costs to tenants their rent will be higher than others and they will no longer be competitive.
Agreed: if anything we should tax combustibles more to make them less appealing
O&G is actually subsidized.
Maybe only where you live?
AFAIK in most places (and certainly where I live) people pay taxes on heating oil/gas (VAT and oftentimes excises too)
The subsidies come mainly in a form of tax breaks for producers.
But… we were talking about disincentivizing the use of fossil fuels (so that less is burned), not their production (so that more is imported)
Except there is a big housing shortage, so tenants will have to accept those higher rents.
True, but higher rent apartments will be at a disadvantage and will be rented out after the cheaper ones.
