Measuring rent based on maintenance costs

This article presents an exploratory empirical analysis of the actual contribution made by landlords to the maintenance of rental housing, and an estimate of the amount of rental income. This work is in keeping with the hypotheses of classical economists, according to whom income is equivalent to the difference between the price and the value of a commodity, i.e. the amount of labour required to produce it. Through an analysis covering different retrospective periods, maintenance costs are estimated at 10 % of rents, which is well below the 40 % provided for in the calculation of cadastral income used as the tax base for the taxation of rental income. Ultimately, for the various cases studied, the rental income would be in the order of 50 % to 60 % of the rents. Furthermore, the ratio of rental income to actual time spent working by landlords has made it possible to establish assumed wages, which are well above the average wage. This is an indication that letting accommodation is more about the extraction of income than the remuneration of work.