On Tue, 20 Mar 2012 10:56:40 +0000 Andrew May wrote :
Now imagine the govt introduces a rental property tax of, let's say
$100. You really now need to rent for $400-$420 but the market won't
allow that. So, you exit the market. If the tax applies to everyone
renting then a lot of other people will exit too. That reduces the
supply of rental properties and as a consequence pushes up prices to a
point where those that are left can recover the extra $100 that they
are having to pay through increased rents.

There would be fewer rental properties on the market, which would tend to
push rents up. But it would also take BTL buyers out of the market which
would increase the supply of owner-occupied property, so at the margin
those who might have rented would now find it more worthwhile to buy.

--
Tony Bryer, Greentram: 'Software to build on',
Melbourne, Australia www.greentram.com