I live in Malta (expat), where the rental prices have exploded over the last 5-6 years due to a heavy influx of expats in finance and online gaming, that have higher disposable income and want to rent short term, as they might be there for just a few years. However, the businesses in that sector are starting to look elsewhere, due in part to rental prices and cost of living - which makes it more difficult to attract the right kind of expats needed in the businesses. It also makes it very difficult for young people to move away from home (or couples splitting etc).
- A lot of old properties are vacant (there is virtually no tax on owning a vacant property)
- Income from a lot of rental properties is not declared/taxed. The tax rate is only 15% for income on rental property.
- It is virtually free to have a vacant property (extremely low/no tax on real-estate)
What are some political instruments that have been used try to keep rental prices under control and prevent it from driving up cost of living => leading to less growth?
- Adding a sort of property tax on vacant properties (giving the incentive to rent it out, even at slightly lower prices)