The real estate sector is controlled by different laws/regulations. Thus, knowing what your rights are is critical. Jonathan Osler provides a comparison of some basic rules in different countries. The countries that allow citizens to own their homes without any rent/registration fee are Canada, the US, Australia, and New Zealand. At the same time, Germany has the lowest property taxes in Europe. In Greece, the supreme court ruled that land is a state’s most important asset, and thus it must be improved for public benefit.
Similarly, municipal statutes often require that owners of subdivided properties maintain the perimeter wall or pay a fee to have it done. In Japan, every property owner must register his real estate regardless of whether they own the property in person or not. In contrast, Denmark and Sweden allow citizens to own their homes without any registration fee or effort to improve by the owner if they earn an average income that matches or exceeds their average wealth.
In France, a careful distinction exists between the revenues from Tax on construction and land values. Land-Value Tax is a tax on land value rather than on the value of the structures built on it. German law is particularly favorable for commercial owners. Sometimes owners cannot be held responsible or have any liability to pay for damages caused by their tenants. In contrast, in the US, most states tax commercial properties at a higher rate than properties used for residential purposes. On the other hand, the Chinese do not pay any taxes on improvements unless they are rented out.
Such differences in taxation often create an incentive for real estate owners to create more liabilities (i.e., rent it more) or even to refrain from renting out their property at all in some areas. As this article explains, when the US was facing a severe housing shortage, such laws may not help home buyers at all. They could increase the housing crisis by preventing owners from realizing their profit potential.
The Chinese, who do not pay any tax on their property improvements (except if rented at least once per year), can rent out their property to the maximum extent possible. In the US, however, a law that would have prevented this phenomenon could have encouraged owners to rent out their property at a time when they would be making a loss on renting their home. To make a profit on their investment and enjoy the tax-free gains on their improvements.
Property rights are essential for people’s well-being. People without property rights cannot quickly achieve development and satisfy basic needs. People with property rights can quickly achieve development and satisfy basic needs.
The collection of economic and other data from different countries allows us to study the relationship between property rights and development. According to Jonathan Osler, such data is vital whenever clients make explicit and informed decisions.
To conclude, property rights are extremely important for economic development. Most people can afford a house, those who have high property rights can live without paying much rent. As a result, low-income people can save money and find jobs easily.