Final Word from Friday, April 18, 2003
One of the cruel realities of capitalism is that an asset is sometimes a liability. Taxes on real estate are so high in many countries that ownership can become a burden. But not in the CR. Property taxes have been so low that MP Vlastimil Tlustý of ODS wants to eliminate them. He argues that administering the tax costs more than it raises. In contrast, MP Michal Kraus of ČSSD wants to raise the tax to encourage owners to put their idle property to effective use or to sell it to someone else. According to HN, he'd make exceptions for primary housing. For a well-functioning housing market to exist, some mechanism will need to be found for encouraging people on the lower end of the social scale to move out of attractive areas. So far, increases in market values have been the main motivating force. How and when to shift to a system based on "tax punishment" will have tremendous social and business implications.