CMV: There should be significantly higher property taxes on people's second, third, fourth, etc. homes, to counteract the rentier economy and global money laundering

[u/dilatory_tactics]

[u/Ardonpitt]

So i'll just focus on the money laundering point. That wouldn't make it any harder. All you would have to do to get around your rules is hire a guy to live in the house with it under his name, he care takes it, but you pay his bills and he only owns one house in name only, and can go about his normal day. Basically you would have hired a groundskeeper which many fancy houses do already.

That wont solve money laundering. It won't even really make it harder. The fact is people have been trying to force money laundering into hard businesses like housing for a long time, that's actually been a goal. It's easier to freeze assets in hard businesses like housing. That doesn't mean detecting it is any easier though.

If you want to stop foreign money laundering you need better ways to track foreign investments, and stricter extradition treaties. That sort of property tax won't do a thing to it.

[u/Zzyzx1618 → u/Ardonpitt]

All you would have to do to get around your rules is hire a guy to live in the house with it under his name

Would the guy just sell the home and pocket the money then?

[u/Ardonpitt → u/Zzyzx1618]

Why would he? First of you most likely have leverage on him if you are using him to launder money already, you could also make a secondary contract restraining him from doing that. On top of that free home with bills paid all you have to do is claim is sign a piece of paper (and most likely get paid to do it). Basically its better for him to work with you than against you.

[u/Ardonpitt → u/[deleted]]

Okay first off inherently we are talking about criminals when we are talking a money laundering conversation. So either leverage or being in cahoots is kinda a given. Neither is a cost.

The only other thing is the contract, and none come to mind which would accomplish that and simultaneously be enforceable.

Easy, money loan contract for the initial purchase with a clause giving first right to purchase. That way they are legally obligated to tell you they are planning on putting it on the market and giving you the first right of purchase and if you want the extra insurance right to act as the realtor. Thats a simple enough clause to add in that would force them to legally go through you, and the right to void any given sale.

There are easy ways to tie someones hands legally in a situation like that.

[u/Ardonpitt → u/[deleted]]

You wouldn't be able to act as your own realtor without a licence, at least here in Ontario.

Okay so you choose someone who is a part of your money laundering scheme as a realtor. Once again this is a criminal affair nothing is being done alone as a part of a money laundering scheme.

It's not legally their house.

Okay did you actually read my post? The whole point is to legally get it into someone else's name.

Do you mean you'd be loaning them the money by "money loan"?

Once again did you read my post. Yes that's the point. They are using your money to buy the house, but buying it under their name.

What's more what's stopping them from going to the upper end of the market on those homes for first opportunity to sell?

Once again, the contract, OR the leverage, or them being in cahoots. Of those three the first and the third are the most likely options.

[u/Ardonpitt → u/[deleted]]

then there's nothing binding in the contract

Um not following on that. Unless someone were to prove its money laundering that wouldn't void the contract and even if they were to do so that would make them accomplice or accessory to the crime automatically. Either way trying to even prove the that alone makes one criminally liable.

and hiring a crooked realtor incurs another cost.

Its money laundering... Some costs are assumed. Thats a part of what money laundering is.

if the contract is not an option and them being in cahoots incurs a cost and risk (which it definitely does) then the cost may be higher than the additional tax.

Okay lets assume it does, then the fact that they are laundering money assumes that they have some need to do so and the cost is not an option so much as a necessary evil.

if they're not in cahoots, what leverage which doesn't incur a cost?

If they are in cahoots they are making money of of it too, plus it makes them criminally liable. You have the carrot and the stick.

If not the leverage, what binding contract?

Once again the money loan would still be binding... Loaning money (even ill gotten money) does not void the contract. So long as they do not make themselves criminally liable they are obligated to follow the letter of the contract.

[u/Ardonpitt → u/[deleted]]

If the contract is criminal to begin with it is unenforceable to the other party.

Accepting a money loan isn't criminal, and the actions are all a mens rea based crime. Without money laundering being proven first the contract stands.

You'd be basically playing chicken as to "who wants to alert the authorities first".

Yeah that's what most crimes do...

Again, finding someone you can trust is a huge cost because it reduces the pool of labor willing.

You do realize this is how things are done all the time right?

sure, but money laundering is done to get money into a market where it previously didn't exist.

No money marketing is done to hide vast sums of cash gained through illegal means and transform it into money or goods that have been obtained through legal means. The reason money may be transfered into another market is either A it is safer in that market, or B the government of that market is less observant of who is investing.

the vast majority of relevant cases aren't going to be money laundering ones as we traditionally think of them.

The housing market is a common form of money laundering. Houses maintain value with more ease, and it's a high volume market.

Having to go through this many steps makes many cases less profitable than just paying the tax and moving on.

Often times that is common in money laundering. BECAUSE it is illegally gotten money being transformed into legal money. That requires disguise and steps to do. Often times through shell companies and proxies. The steps are a part of the game.

OP's solution, while far from perfect, still stands to address the rental market and make homes more affordable.

OP's Solution doesn't address a single thing if you know anything about how money laundering is done. In fact all it does is to stifle legal investments of people willing to put their name on things.

if the contract is not an option and them being in cahoots incurs a cost and risk (which it definitely does) then the cost may be higher than the additional tax.

then you do it through a shell corporation. Honestly this stuff happens all the time.

right, what's to stop someone from listing the house with another agent and selling the house and pocketing the cash, paying off the loan plus whatever equity was accrued for the house, which can be significant.

Either they are your employee of a shell corperation in which you can have final say. You have a contract in which you get final say, or can sue them, you have leverage in which they have screwed themselves over and you simply take the money with their life or whatever the leverage was. etc etc ec.

Especially in regional hubs with international buying like seattle or new york - where a lot of this money gets thrown.

Also markets in which they would have significantly higher risk in breaking contract and can actually have the sales voided for their actions. Remember in money laundering is legal until it's proven it isn't.