In economics, an absentee landlord is a person who owns and rents out a profit-earning property, but does not live within the property's local economic region. The term "absentee ownership" was popularised by economist Thorstein Veblen's 1923 book of the same name, Absentee Ownership. Overall, tax policy seems to favour absentee ownership. However, some jurisdictions seek to extract money from absentee owners by taxing land. Absentee ownership has sometimes put the absentee owners at risk of loss.
In Ireland before 1903
Absentee landlords were a highly significant issue in the history of Ireland. During the course of 16th and 17th centuries, most of the land in Ireland was confiscated from Irish Catholic landowners during the Plantations of Ireland and granted to Scottish, Welsh and English settlers who were members of the established churches (the Church of England and the Church of Ireland at the time); in Ulster, many of the landowners were Scottish Presbyterians. Confiscated land was also given to absentee Protestant landlords in Great Britain, some of whom rented it out to the Irish, while they themselves remained residents of Scotland, Wales and England. By 1782 the Irish politician Henry Grattan deplored that some £800,000 was transferred annually to such landlords. He attempted to place an extra tax on remittances to absentee British landowners. Many absentees also reinvested part of their rents into roads and bridges, to improve local economies, that are still seen today. A notable beneficial absentee in the 19th century was Lord Palmerston, who went into debt to develop his part of Sligo; an investment that eventually paid off.
By the 1800s resentment grew as not only were the absentee landlords Protestant (while most tenants were Catholic and forbidden to inherit land), but their existence meant that the goods produced in Ireland were primarily exported. This system became particularly detrimental to the Irish population during the Great Famine when, despite Ireland being a net exporter of food, millions starved, died of disease, or emigrated. In the years following, the land issue with the Irish Land League's Land War became a significant issue in Ireland. The land issue was one of the historic factors which resulted in Ireland's troubled history until the 1920s, though it had largely been addressed legislatively by 1903 in the Irish Land Acts.
On Prince Edward Island before 1867
An absentee landlord crisis was a key factor in Prince Edward Island's decision to become a part of Canada when the idea of Confederation was proposed in 1867. In the mid-1760s, a survey team divided the Island into 67 lots. On July 1, 1767, these properties were allocated to supporters of King George III by means of a lottery. Ownership of the land remained in the hands of landlords in England, angering Island settlers who were unable to gain title to land on which they worked and lived. Significant rent charges (to absentee landlords) created further anger. The land had been given to the absentee landlords with a number of conditions attached regarding upkeep and settlement terms; many of these conditions were not satisfied. Islanders spent decades trying to convince the Crown to confiscate the lots, however the descendants of the original owners were generally well connected to the British government and refused to give up the land.
In 1853, the Island government passed the Land Purchase Act which empowered them to purchase lands from those owners who were willing to sell, and then resell the land to settlers for low prices. This scheme collapsed when the Island ran short of money to continue with the purchases. Many of these lands also were fertile, and were some of the key factors to sustaining Prince Edward Island's economy.
In 1864, the Island government saw union with Canada as a possible solution to the landlord crisis. This followed a rent strike and riots on the Island. At the Charlottetown Conference, delegates proposed a fund to purchase landlords' holdings if the Island joined Confederation. Several weeks later at the Quebec Conference this offer was withdrawn. The Island resolved not to enter Confederation as a result. The government refused offers from the other provinces and relented in 1873 only after the local economy was pushed near to collapse. Under the terms of union, Canada agreed to provide the Island with an $800 000 fund to purchase the remaining absentee holdings. in 1875, the Land Purchase Act was enacted to force owners of the large estates to sell their holdings to the provincial government.
