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High property taxes are good

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Re: High property taxes are good

#191

Post by landemva »

dwater wrote: post #87
kashkhan wrote: post #37

Earlier quoted context omitted.

property taxes are terrible for old people. you should be able to buy a reasonable amount of land tax free. USA has about 2.5 billion acres. 1/4 acre per person in an average area tax free is reasonable.

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the only way you should be able to own land tax free is if there are no government services provided on that land. No utilities, no public road, no emergency services, no municipal services. I don't know of anywhere in the US where that is an option. Unless you're s…

I live in a town like this. 'Roads' are actually reciprocal easements to allow all other land owners to pass. Each lot has water well and septic, though one group of houses has a large shared water system which pools the individual well permits.

Electricity and gas and internet are private companies using an easement.

Police and fire can easily be funded by sales tax, just like the public transit. Alternatively, land owners can voluntarily pay yearly for police and fire, or opt-out just like people are not forced by government to buy homeowner insurance.

Re: High property taxes are good

#192

Post by tclancy »

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…

Southern NH here and I would be interested to see if NH's eye-watering property taxes (when you only have one lever, it gets used a lot) have a similar effect as Chicago. Personally, being somewhat involved in city politics, while I appreciate your take, it does mean pricing people out of their forever homes when they've done nothing more than retire to a fixed income in the middle of a bubble. I don't have the answer, but I can definitely imagine the fear of the unknown seeing you will not only be forced out of your home but your town and region to find something affordable.

Re: High property taxes are good

#193

Post by SoftTalker »

jjoonathan wrote: post #171
dwater wrote: post #87

Earlier quoted context omitted.

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the only way you should be able to own land tax free is if there are no government services provided on that land. No utilities, no public road, no emergency services, no municipal services. I don't know of anywhere in the US where that is an option. Unless you're s…

> tax free if there are no government services provided on that land You're still giving the "it's property" framing waaay more credit than it's due. Remember, granting someone exclusivity to a contested resource means preventing other people who would like to use the resource from using the resource. It's entirely reasonable for those people, represented in aggregate by the government, to ask for compensation in ret…

Maybe we should be honest and say that you can't "own" land? Government always has eminent domain, and power of seizure for unpaid taxes. You are effectively renting the land from the government. Why not just call it that. Give people a 99 year lease instead of a mortgage and property tax. If you do nothing with the land, your lease can be terminated. If you improve the land (build a house on it), you can depreciate that on your taxes as a leasehold improvement.

Re: High property taxes are good

#194

Post by naasking »

tptacek wrote: post #158
naasking wrote: post #149

Earlier quoted context omitted.

If tax policy is not designed with these considerations in mind, then it will incentivize an improper mix and deteriorate the livability of the city. For instance, where I live the city core has been abandoned by families because no family-sized units have been built in something like 40 years. So families move out of the cities and then commute which causes all sorts of traffic problems, wastes their time in these c…

Why is that necessarily the case? The market has much better information about the demand for 3bdr apartments than cities and counties do. Mostly we have the opposite problem: top-down policy from local governments impedes the construction of 3bdr apartments.

It's a mistake to assume that builders are responding to demand. All actors in a market have only partial information. To take my city as an example, the housing market started heating up, so builders started constructing condos and tried to pack as many units into their building as possible, thus improving supply. This created a vibrant urban centre for young people who live on their own in modest apartments and drove up demand among that cohort even further, thus incentivising further construction of those same units, creating a self-reinforcing cycle.

But young people aren't the only ones who need to be downtown, as I said, and families were driven out to the suburbs for suitable housing. They have to commute instead, which has caused all sorts of gridlock and the usual problems with urban sprawl.

If the right incentives existed for mixed housing, tax incentives included, then this wouldn't happen, and people of all ages could afford to live closer to where they work, thus alleviating many of those issues and creating more livable cities.

Here in Canada we already do this in one sense by mixing government housing among more affluent neighbourhoods. This has prevented the formation of ghettos, but this same approach hasn't been applied to create an appropriate mix of housing for all different living arrangements.

So given a land value tax incentivises certain kinds of land use, my question is whether it would incentivise using land to make urban centres more livable for all types of people, rather than only certain kinds of people or lifestyles.

Re: High property taxes are good

#195

Post by sinecure »

There is so much incompetence and political game playing regarding property taxes. I work in commercial real estate development. We negotiated a TIF district in a small midwestern town to help redevelop their vacant mall. In theory, if we could redevelop the mall and fill it with new stores, the sales taxes and property taxes from this growth would greatly benefit the city over the long term and help finance this risky project.

First we came into battle with the school district. They would not allow us to build apartments on the mall site because "renters don't contribute to property taxes for the school", even though the citizens of this town need rentals because not everyone can afford a home. It then came to light that the city had been paying the school district out of their operating budget... which is illegal, schools can only be funded by property taxes. But would any politician want to go to war with the school district because they had accidentally been paying them illegally with taxpayer dollars? No way, they'd be voted out for attacking schools. So the school district continues draining the operating budget from the city to this day, while also getting their share of property taxes.

Enter the county assessor. We went back through all the assessment records and discovered that the county assessor had not re-assessed the commercial properties in the area for 8 years... meanwhile jacking taxes up on single family homes annually. Essentially they were giving businesses a freeze on property taxes while shifting the burden onto homeowners. If the county wasn't reassessing commercial real estate, than our TIF development couldn't demonstrate growth as the taxes would not change! So we tried to shake the hornets nest and let the county and city know that their taxpayers were being taken advantage of...

What was the end result? Why had they not been reassessing commercial properties? Incompetence, the assessor was some idiot who was voted in because he had the "D" next to his name and did not know anything about assessing property taxes and argued that he was simply "too understaffed" to assess commercial properties for the last 10 years.

Now imagine a whole country where massive, expensive errors like this can play out without anyone noticing for nearly a decade... it's frightening how broken, corrupt, or incompetent our government is in the United States.

Re: High property taxes are good

#196

Post by wizofaus »

Retric wrote: post #19
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 economi…

In Australia at least local government rates are based on "improved property value", i.e. you get taxed more from building a house on your land. It absolutely does lead to land-sitting even in higher density inner-city suburbs.

Re: High property taxes are good

#197

Post by rat87 »

landemva wrote: post #191
dwater wrote: post #87

Earlier quoted context omitted.

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the only way you should be able to own land tax free is if there are no government services provided on that land. No utilities, no public road, no emergency services, no municipal services. I don't know of anywhere in the US where that is an option. Unless you're s…

I live in a town like this. 'Roads' are actually reciprocal easements to allow all other land owners to pass. Each lot has water well and septic, though one group of houses has a large shared water system which pools the individual well permits. Electricity and gas and internet are private companies using an easement. Police and fire can easily be funded by sales tax, just like the public transit. Alternatively, land…

Sounds absolutely terrible. I'm sorry. Hope your town gets it's shit fixed

Re: High property taxes are good

#198

Post by dragonwriter »

Johnny555 wrote: post #113
kashkhan wrote: post #37

Earlier quoted context omitted.

property taxes are terrible for old people. you should be able to buy a reasonable amount of land tax free. USA has about 2.5 billion acres. 1/4 acre per person in an average area tax free is reasonable.

USA has about 2.5 billion acres I don't see how that's relevant, not all land is equally well suited for housing, especially among the elderly who are likely to need some sort of living assistance and regular access to healthcare. property taxes are terrible for old people. you should be able to buy a reasonable amount of land tax free. I think something like California's Prop 13 that puts a cap on property tax incre…

> I think something like California's Prop 13 that puts a cap on property tax increases is a better idea

Prop 13 is one of the worst ideas in taxation ever. It would be better just to let the aged and disabled freely defer property taxes beyond a certain, income-based level (and maybe also to let other people do the same with certain limits on total deferred amount relative to assessed value for time-unlimited deferrals, and total time for value-unlimited deferrals.)

Re: High property taxes are good

#199

Post by seanmcdirmid »

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.

> Land value taxes are even better. Property taxes provide a disincentive to making the land more productive.

I could get on board with this if cost to build and demolish were considered. We have a lot of SFHs that don't make sense to turn into town homes yet because the value of the home on property + demolition costs + cost to build new townhomes on property is greater than what those townhomes could sell for.

More to the point, a blind land value tax could create a lot of waste through otherwise unproductive land repurposing (only productive because the tax makes it so).

Re: High property taxes are good

#200

Post by rahimnathwani »

gnicholas wrote: post #185
rahimnathwani wrote: post #91

Earlier quoted context omitted.

"They can also hand it down to their family, entrenching wealth for generations." Not any more.

I think this new rule only applies to property that is inherited and not lived in by the inheritor (e.g., rental property or vacation home). If you inherit a home and live in it, I think you can still keep the old property tax basis. There may be some dollar value limitations or other rules I’m not remembering though. EDIT: just checked, the property value can go up by $1M from when it was purchased without the inher…

IIRC the taxable value (not sure of the technical term）goes up by up to $1MM
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