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How Much Money Do Parking Lots Make?

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Re: How Much Money Do Parking Lots Make?

#101

Post by sokoloff »

jumpingmice wrote: post #86
yonran wrote: post #49

Earlier quoted context omitted.

The split roll initiative likely exempts many parking lots from reassessment at least until June 2025 since they can count as “small business” (fewer than 50 employees) ( https://oag.ca.gov/system/files/initiatives/pdfs/19-0008%20%... )

That's so stupid. I've never met a real estate concern that had ANY employees. The fact that a building is owned by 1 guy who outsources everything does not make it a "small business".

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Re: How Much Money Do Parking Lots Make?

#102

Post by sokoloff »

jedberg wrote: post #48
ladberg wrote: post #47

Earlier quoted context omitted.

That's great! I'd image that could alleviate a ton of housing issues and government funding issues in California. Does anyone know the chances of it passing?

There's no polling on it yet. I suspect it will be close because there are a lot of very rich people who will lose a lot of money if this passes. Property tax is basically a wealth tax. Most wealthy people don't want their wealth taxed. They'll pay millions to defeat this. I wouldn't be surprised if they made ads that straight up lie and tell people their property tax will go up and some BS about farms.

Though a lot of wealth is tied up in property, I see property taxes as more of a consumption tax. I see it as you are consuming the right to exclude others from that property for a year.

A fully paid house and a 97% mortgaged house pay the same property tax in most locales.

(I also think that tenants rather than landlords are paying “going rate” property taxes, even though landlords are the ones writing the check based on actual rates.)

Re: How Much Money Do Parking Lots Make?

#103

Post by starfallg »

asokoloski wrote: post #5
onlyrealcuzzo wrote: post #2

At least in California, especially in Los Angeles, it's really important to factor in that parking lots -- even on land worth $10M+ -- often pay property taxes as little as $100-$1000 a year (thanks to Prop 13). You buy a parking lot, sit on it as the value of land increases (paying effectively 0% in taxes), then you eventually sell, paying only a capital gains tax (much lower than income). I only bring up California…

Exactly. Taxing property encourages speculation and under-development. Showing an alternative, Pennsylvania has several towns and cities with a split-rate tax, which means that there's a higher tax on the assessed land value than on the assessed value of the property. Taking this to an extreme, you can tax only the land value, not the property, providing a very strong incentive to make the best use of desirable land.…

> And not just that, but typical property taxes provide a disincentive to even improve your own property, since you'll pay more tax. They encourage blight.

A land value tax still does this, albeit indirectly. If you improve your property, the area gets marginally more desirable and land value rises.

The solution for this in UK is to remove capital gains tax for the main home of owner-occupiers, and a transaction tax (stamp duty) paid by the purchaser.

Re: How Much Money Do Parking Lots Make?

#104

Post by sokoloff »

briandear wrote: post #95
thatfrenchguy wrote: post #66

Earlier quoted context omitted.

> And not just that, but typical property taxes provide a disincentive to even improve your own property, since you'll pay more tax. They encourage blight. A good old wealth tax on everything would fix that.

Most OECD countries have dropped wealth taxes. They don’t work. In 1990, 12 OECD countries had wealth taxes, now, only 4. A wealth tax has a lot of unintended consequences and while it sounds good as a populist sound bite, reality isn’t so simplistic.

I see that list of 4 (Switzerland, Spain, France, and Norway), yet I know that the Netherlands is in OECD and also has a wealth tax: https://en.m.wikipedia.org/wiki/Taxation_in_the_Netherlands#...

Re: How Much Money Do Parking Lots Make?

#105

Post by projektfu »

sokoloff wrote: post #101
jumpingmice wrote: post #86

Earlier quoted context omitted.

That's so stupid. I've never met a real estate concern that had ANY employees. The fact that a building is owned by 1 guy who outsources everything does not make it a "small business".

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Why should it? What’s special about that case?

Re: How Much Money Do Parking Lots Make?

#106

Post by coldtea »

briandear wrote: post #95
thatfrenchguy wrote: post #66

Earlier quoted context omitted.

> And not just that, but typical property taxes provide a disincentive to even improve your own property, since you'll pay more tax. They encourage blight. A good old wealth tax on everything would fix that.

Most OECD countries have dropped wealth taxes. They don’t work. In 1990, 12 OECD countries had wealth taxes, now, only 4. A wealth tax has a lot of unintended consequences and while it sounds good as a populist sound bite, reality isn’t so simplistic.

Did they dropped them because they "don't work" or because the wealthy lobbied against them?

Re: How Much Money Do Parking Lots Make?

#107

Post by coldtea »

qiqitori wrote: post #63
yardie wrote: post #40

Earlier quoted context omitted.

> parking lots -- even on land worth $10M+ -- often pay property taxes as little as $100-$1000 a year (thanks to Prop 13). Commercial property is also exempt under Prop 13?! What a screwed up system. I kind of understand if it applies to primary residences. I think it's ridiculous it also applies to commercial property as well.

I don't get property taxes. Why make people pay taxes on land they already paid a bunch of money for?

One might as well ask "Why make people pay taxes on income they worked to make?".

There's no some god-given justification for taxes.

We have them because:

a) somebody can enforce their payment

b) societies need a money pool to do public things

c) societies need to encourage/discourage some things

A country could opt not to have taxes, and not maintain an army for example, and live it to the goodwill of the citizens to build infrastructure. That couldn't would be stomped by one that did have taxes and used them to build a good army. So that doesn't work out that good...

Now, assuming a society decide it needs taxes, what taxes to have is more a question of "how much money are needed" and "how to present it nicely" and "what to encourage/discourage".

Regarding "how much money is needed", the justification for property tax is simple: if income tax money aren't enough, governments might add not just property tax, but even a breathing tax. On the plus side, property is difficult to hide (as money would be e.g. in the Kayman islands).

Regarding "what to discourage", the justification for property tax is, not to hog down property and prevent its use.

You also want to get some of the value the community/government creates in an area and pushes property values (not just market value, but also use-value, like having a school nearby) up back.

Re: How Much Money Do Parking Lots Make?

#108

Post by acollins1331 »

sokoloff wrote: post #101
jumpingmice wrote: post #86

Earlier quoted context omitted.

That's so stupid. I've never met a real estate concern that had ANY employees. The fact that a building is owned by 1 guy who outsources everything does not make it a "small business".

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Revenue

Re: How Much Money Do Parking Lots Make?

#109

Post by sokoloff »

projektfu wrote: post #105
sokoloff wrote: post #101

Earlier quoted context omitted.

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Why should it? What’s special about that case?

I don’t know; I think it is a small business. Ask @jumpingmice.

Re: How Much Money Do Parking Lots Make?

#110

Post by sokoloff »

acollins1331 wrote: post #108
sokoloff wrote: post #101

Earlier quoted context omitted.

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Revenue

Most landlords are taking in (far) less than a $30MM in gross receipts per year though, right?

(That’s the SBA cutoff for “small business” in property renting; NAIC business codes 5311x0.)

https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%...

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