Speculators or brave entrepreneurs? The left wants to tax flippers, Petru defends them

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Flippers: speculators, as the Left sees them, or brave entrepreneurs who invest money in the uncertain real estate market, as Ryszard Petru sees them? Magdalena Biejat announced that the Left wants to limit their activities through an additional tax. We will know the details in a few days.

Candidate for the mayor of Warsaw, Magdalena Biejat, announced that in the coming days the Left will submit a draft bill that will limit speculation on the real estate market. For now, Biejat did not want to discuss what solutions it contains.

What is flipping? Who are flippers?

What is known is that one of the proposals provides for a tax on flipping. This is a phenomenon in which a person with cash buys an apartment, often in poor technical condition, renovates it and quickly resells it. Some say it's speculation, for others it's a regular business activity in which an entrepreneur takes a risk, spends money, raises the standard of the apartment and sells it at a profit.

– Of course, we are aware that the anti-fliping shield will not solve all the pathologies of the housing market. But today it is a growing problem contributing to increasing housing prices. A separate problem is investing in apartments just to keep them, hoping for an increase in value, and here I believe that the introduction of a cadastral tax, for example on the third apartment, should be considered. Another issue is the purchase of apartments by large funds. Although it is not as urgent a problem in Poland as in Western Europe, we should not ignore it, she said in an interview with Interia.

The scale of flipper activity is difficult to estimate because the operating model they adopt is also different. Giants in the industry boast that they can buy and resell over a hundred apartments a year, they have their own renovation companies, strategies and a lot of cash, which they are ready to use at any time to buy an attractive apartment. There are also small-timers in this business for whom buying a flat, renovating it and reselling it is not their main source of income. They renovate in their free time, often on their own or with the help of their family, and treat the profit from the sale as a cash injection that will come once every few years.

Some flippers monetize their popularity and organize courses teaching real estate investing. The high turnout shows that there is huge interest in this way of earning money. If it's such a good business idea, why do Leftist politicians want to put an end to it? The presence of flippers is not indifferent to the real estate market. Speculators who come in with cash are much more attractive to sellers than the average family who has to rely on a loan. Its granting takes time, so sellers are more willing to conclude a contract with an entrepreneur who can arrange to sign the contract at a notary a few days after the presentation of the apartment.

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For flippers, the time between buying a flat and reselling it is important, so renovations are often carried out sloppily, but buyers discover defects only after some time of use.

The idea of ​​taxing the activities of flippers was commented on on social media by Polish 2050 MP Ryszard Petru. In his opinion, we should not talk about speculation at all, because it is ordinary business, and after all, it is related to the desire to make a profit.

“The idea of ​​taxing flips and calling them speculation shows a lack of understanding of the topic and is detrimental to the entire economy. Those who do flips risk their capital. They are also not sure that they will sell the premises after renovation at a profit. So they take business risks,” he noted.

And further: “If we tax economic activity in Poland, it will move abroad. And who, especially the Left, should care about budget revenues,” he added.

The latter, i.e. the idea of ​​flippers going abroad and buying apartments there, will be welcomed not only by the Left, but also by quite a large group of real estate buyers.

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