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High property taxes are good

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Re: High property taxes are good

#11

Post by js2 »

From https://en.wikipedia.org/wiki/Land_value_tax

> Property taxes discourage construction, maintenance, and repair because taxes increase with improvements. LVT is not based on how land is used.

From https://www.strongtowns.org/journal/2019/3/8/if-the-land-tax...

> The problem is that the land tax component of a traditional property tax is too small to deter land speculation. Although property taxes vary from place to place, they are typically between 1% and 2% of the property's total value paid annually. If inflation is low, then for longtime property owners, this amounts to roughly the same cost as if they paid a one-time sales tax on the property of between 10% and 20%. Thus, the property tax applied to building values inflates their price by between 10% and 20%. And the property tax applied to land value allows 80% to 90% of publicly-created land value to accrue as a windfall to landowners. Thus, typical land taxes are too weak to discourage land speculation.

Etc. https://duckduckgo.com/?q=economist+land+use+vs+property+tax...

Re: High property taxes are good

#12

Post by kspacewalk2 »

beefman wrote: post #9
cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

Almost all property people buy and sell is productively used, and separating the value of land and improvements is practically impossible. Edit: As a weird example, subtracting what it would cost to build my California house from its current market value gives a value for the lot far lower than the actual market price of an empty lot in this location. This isn't just due to the depreciation of the construction (2012)…

>separating the value of land and improvements is practically impossible.

is routinely done in countries in which variants of land value tax are implemented.

Re: High property taxes are good

#14

Post by tosser0001 »

"interest rates are a powerful tool to help control home prices"

Unless you're paying cash, most people think in terms of what their monthly payment will be. So driving down the price may not make any particular house any more affordable.

Re: High property taxes are good

#15

Post by jherskovic »

vanilla_nut wrote: post #2

In my region of northern New Hampshire, there are a lot of retired folks with houses rising from $200k-ish values to closer to $500k-ish values in the last 5-10 years. As such, there's a lot of discussion around lowering property taxes to help these retirees. In my opinion? Fuck 'em. Property taxes are a brilliant method of perfectly progressive taxation: you can always choose to live in a cheaper home. If your home…

If there was a supply of cheaper housing, I'd agree with this wholeheartedly. Part of the problem is that, in a lot of places (SF, NYC, Seattle, etc) you can price folks into homelessness. Sure, no one is entitled to live in a specific area, but for those who built their lives there, have a community, family, it's cruel to tell them "move to Nowheresville, OH so you can afford a roof"

Re: High property taxes are good

#16

Post by rjbwork »

gedy wrote: post #7
vanilla_nut wrote: post #2

In my region of northern New Hampshire, there are a lot of retired folks with houses rising from $200k-ish values to closer to $500k-ish values in the last 5-10 years. As such, there's a lot of discussion around lowering property taxes to help these retirees. In my opinion? Fuck 'em. Property taxes are a brilliant method of perfectly progressive taxation: you can always choose to live in a cheaper home. If your home…

> Those of us who can't afford property will shed no tears. You seem to believe the fallacy that not being able to afford a home is other homeowners fault, and not due to poor government planning (likely by the same politicians you willingly vote for.)

And the same politicians that those homeowners vote for. And lobby. Especially retirees who have time to do things like endlessly harangue their local councils to implement NIMBYist policies to prevent increasing housing supply in order to drive their housing prices higher. Of course, couched in language like "preserving the historical character of the neighborhood" and "keeping the riff raff out".

Re: High property taxes are good

#17

Post by havblue »

cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

This would certainly impact people with older houses disproportionately relative to the wealthier folks doing the teardowns, though. Probably a political downside.

Re: High property taxes are good

#18

Post by hedora »

The article overlooks one important factor: Raising property taxes would lower house values, reducing loan sizes, and therefore bank profits. We can't have that money being squandered on social services or infrastructure.

Re: High property taxes are good

#19

Post by Retric »

cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

I don’t think that’s a meaningful difference. It would take an extreme property tax to actually incentivize an empty field over productive use of that space.

It might in theory make a difference when considering replacing a 40 story building with a 42 story one, but in practice you really don’t see that kind of construction project. In that context pushing for larger jumps before replacement might actually be economically and environmentally beneficial.

Re: High property taxes are good

#20

Post by francisofascii »

vanilla_nut wrote: post #2

In my region of northern New Hampshire, there are a lot of retired folks with houses rising from $200k-ish values to closer to $500k-ish values in the last 5-10 years. As such, there's a lot of discussion around lowering property taxes to help these retirees. In my opinion? Fuck 'em. Property taxes are a brilliant method of perfectly progressive taxation: you can always choose to live in a cheaper home. If your home…

Or, they can simply get a reverse mortgage using the $300K free appreciation they realized.
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