We’ve heard a lot of talk about housing shortages in South Lake Tahoe in recent years. Most of us agree that the city could use more affordable housing. One group has been pushing Measure N as a solution. This ballot measure would enact a South Lake Tahoe vacancy tax. We believe this is the wrong solution and that it could be bad for the city and its property owners. Read on to learn more about why we oppose Measure N.
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Why You Should Vote Against the South Lake Tahoe Vacancy Tax
Measure N will be on the ballot for this upcoming election in 2024. It proposes a vacancy tax for residential units that would go into effect in 2026. The tax would apply to most residential units left vacant for over 182 days in a calendar year. It would place a $3,000 tax for the first vacancy year and increase to $6,000 for all consecutive years thereafter.
The law primarily targets second homes and vacation properties, with limited exceptions for property owners. Supporters think the tax will discourage vacancy and increase availability. However, it falls short in several ways.
A New Tax on Homeowners
Property taxes are already a significant expense for the owners of second homes in South Lake Tahoe. Adding a new tax would increase their burden. The tax is also unbalanced. It treats all second homes the same regardless of size or value. Many properties are small vacation homes that middle-class people work hard to afford. Taxing them all the same creates a system many would consider unfair. Additionally, the tax could price some of these middle-class owners and buyers out of the South Lake Tahoe market.
More Stress and Hassle
Measure N would also put new stress and burdens on homeowners in other ways. The law assumes all properties are vacant unless proven otherwise. To avoid the tax, owners must submit a declaration of occupancy. That means you must prove you’re using your own home. Additionally, the city reserves the right to audit for past vacancies for up to five years. If the measure passes, you’ll need to maintain records proving occupancy in case of an audit.
Not a Real Solution
While supporters of Measure N claim it will address housing shortages, it offers no guarantees. The measure doesn’t require any investment in housing development, leaving the funds free to be diverted to other city expenses. Much of the estimated revenue would likely go to maintaining a massive new city bureaucracy. Implementing and managing this new tax would require labor and new systems that would eat into the tax revenue. Even if the tax reduces vacancies, it won’t increase the overall supply of homes or lower housing costs. It may even discourage investment as buyers and developers avoid the tax.
Everyone agrees that affordable housing is an important issue in South Lake Tahoe. However, adding a vacancy tax is not the solution. It’s punitive and burdensome to property owners while doing nothing to solve the problem. Instead of a flawed tax, we should consider incentivizing affordable housing development and long-term rentals.
Let’s all vote no on Measure N so we can start developing solutions that’ll make a difference.
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