What is landlord licensing, how does it work and is it good or bad?
Landlord licensing is a tax on rental property paid by the owners and often passed on to the renter. It is a system of forcing real estate investors to pay a city or municipality a fee for registering their investment property. It usually involve the periodic inspection of the rental property and the fees are touted as paying for that service.
In difficult economic times cities start looking for ways to increase revenue and often do so by trying to find more fees and penalties to impose on the tax payer.
Usually the tax is pushed forth with the notion that there are broke-down hovels all over the place and that by taxing the owners they will be forced to bring them up to code. It is a selective punitive tax, because it does not target owner occupied homes, while it does penalize owners of rental property.
The effects are as follows:
- Taxes, fees and costs result in higher rent for the tenant to pay.
- Landlords become liable to the city for the tenants acts.
- Inspections are an invasion of privacy and a real inconvenience to the tenant and the landlord.
- Investment in the community is discouraged; decreasing property values.
- While codes issues in rental property are enforced, and usually fined; owner occupied properties are allowed to decay without penalty.