High property taxes are good • Hacker News Board

Re: High property taxes are good

#401

Post by 8ytecoder » Wed, Jul 20, 2022, 10:38 PM UTC

fleddr wrote: post #384

I'm struggling to make sense of the cause and effect in the article: "The high cost of property taxes have long pushed away speculative investors as it has pushed the carrying cost beyond what is profitable to hold as a passive investment long-term." Alright, so now the speculative buyers are gone and we're dealing with ordinary home buyers that actually occupy their home. These genuine owners are paying high propert…

Even if this is provable, why not have a progressive property tax rate? Owner occupied properties can be charged half the rate of rented properties. Rather than increase it for everyone and making it harder on the very people who are likely to sell it to a speculative investor.

Re: High property taxes are good

#402

Post by jimmaswell » Wed, Jul 20, 2022, 10:41 PM UTC

spywaregorilla wrote: post #77

jimmaswell wrote: post #69

Earlier quoted context omitted.

Unimproved? Building a parking lot isn't cheap and it does make the land more useful.

It is comparatively cheap and comparatively less useful

Or if you don't want your neighborhood more crowded, it's actually more useful.

Re: High property taxes are good

#403

Post by skybrian » Wed, Jul 20, 2022, 10:45 PM UTC

negamax wrote: post #390

fleddr wrote: post #384

I'm struggling to make sense of the cause and effect in the article: "The high cost of property taxes have long pushed away speculative investors as it has pushed the carrying cost beyond what is profitable to hold as a passive investment long-term." Alright, so now the speculative buyers are gone and we're dealing with ordinary home buyers that actually occupy their home. These genuine owners are paying high propert…

What author is saying is that if a property has a high yearly ongoing costs, it becomes tougher to just hold onto it and not put it into the market i.e. this causes increase in supply. If I have a $10k/year expense on a property, I am forced to at least generate a yearly $10k+ from the property. This would keep the rentals and property prices in the area in check

On the other hand, it also increases the demand to rent property on AirBnB, if that's allowed and it's a desirable area. Tourists can pay more than locals.

In general, as costs go up, the more there is incentive to try to cater to wealthier customers.

Re: High property taxes are good

#404

Post by giaour » Wed, Jul 20, 2022, 10:48 PM UTC

tesseract wrote: post #360

arrosenberg wrote: post #343

Earlier quoted context omitted.

Insured price is based on the structure, not the land. If your house burns down, that's the part they need to spend money replacing. Valuing a structure's replacement cost is (fairly) straightforward based on materials, current labor costs, etc.

And so there is a way to get a reasonable approximation of land value: Subtract the insured value of the improvements (which should be accurate by virtue of being determined by a profitable insurance company in a competitive market) from the appraised property value (which there are generally accepted methods for figuring).

Sort of, but that would give you the "social value" of the land, which it only has because of its present use and its proximity to other land used for specific purposes. E.g., the land under my house is worth $X because it's in a residential area in a major metropolitan area. If I were to build a dense mixed use complex on a large plot of land, I would probably increase the land value (since density would make it a desirable area).

Does LVT look at a piece of land's productive value instead (i.e., how much food you could grow on it or how many minerals you could mine out of it)?

Re: High property taxes are good

#405

Post by twobitshifter » Wed, Jul 20, 2022, 10:50 PM UTC

jmyeet wrote: post #397

This is one area where (I hate to say it) the red states have tended to do a better job than the blue states. Take Texas as an example. Up until this last year at least, Texas had relatively low property values but high property taxes. But high property taxes on a $200,000 house aren't the end of the world. But here's a big one: in Texas, seniors (65+) can defer their property taxes to be settled upon their death. Th…

Instead of taxes, I prefer depreciation terms (see japan), which incentivizes new construction and does no harm to those that continue to occupy the land in old age. you’ll also find that older houses go down in value as expected.

Re: High property taxes are good

#406

Post by jamiek88 » Wed, Jul 20, 2022, 10:51 PM UTC

somethoughts wrote: post #383

chadash wrote: post #95

Earlier quoted context omitted.

The biggest problem (IMO) is that it's not so simple to value land. Where I live, being two blocks over can make a huge difference. It's easy to say "you paid $500k for your house, so we're gonna tax you on $500k". It's much harder to accurately say what someone would have paid for the land were it not developed. I understand the benefits of LVT, but how do you solve this? Are there any good examples of governments t…

It will be interesting to see if Texas ends up with some sort of Proposition 13 equivalent given property values and property taxes have been increasing a pretty significant rate. Fight over increased property taxes in Texas becoming political https://www.youtube.com/watch?v=gzUwoFVUc_I Texas voters to decide on 2 propositions that could impact property taxes https://www.youtube.com/watch?v=Nz67VXkjRfg It seems like…

Having lived in Texas for 20 years I find that hard to foresee as no state income tax is such an often used flex there but stranger shifts have happened.

I moved from an ostensibly low tax state, Texas, to one with an income tax but my overall burden for state costs is pretty much the same or slightly lower as property taxes are low and there is no sales tax (8%+ in Texas).

I was paying over $1500 month in property taxes in Houston burbs.

They’ll get you somehow!

Re: High property taxes are good

#407

Post by social_quotient » Wed, Jul 20, 2022, 10:51 PM UTC

Maybe instead of messing with the money via the fed and then finding volatility in housing we should just end the fed. Housing becomes a safe haven asset to avoid the other ramifications of fed policy namely inflation and the machinations of policy qe/qt, contractions and tightening. Yes it’s not in a vacuum but… we didn’t get here by accident.

Taxing and taxing higher on property is an assault on our ability or “own” property which is a freedom. Free societies have property ownership. Higher taxes whilst monetary devaluation seems like the system now wants to take away our ability to own things.

https://en.m.wikipedia.org/wiki/End_the_Fed

https://thehill.com/opinion/finance/570895-the-debate-we-sho...

Re: High property taxes are good

#408

Post by jelliclesfarm » Wed, Jul 20, 2022, 10:54 PM UTC

I have generally found it to be true that only those who don’t pay property taxes..that is, those who don’t own property by virtue of paying for it and/or have inherited property..are usually the ones who clamour to increase property taxes as a punitive measure.

In other words, the assetless classes support taxing those with earned fixed assets.

When reframed this way, the article reads to me as a high falutin petty and bitter whine.

All taxes are theft. The only justifiable tax is a tax on consumption and perhaps a tax on children because population increases exponentially. That would take care of all the bundle of taxes and simplify the tax code.

Re: High property taxes are good

#409

Post by washadjeffmad » Wed, Jul 20, 2022, 10:55 PM UTC

cryptonector wrote: post #395

fleddr wrote: post #384

I'm struggling to make sense of the cause and effect in the article: "The high cost of property taxes have long pushed away speculative investors as it has pushed the carrying cost beyond what is profitable to hold as a passive investment long-term." Alright, so now the speculative buyers are gone and we're dealing with ordinary home buyers that actually occupy their home. These genuine owners are paying high propert…

I doubt speculator demand has anything to do with anything in the long term. I also doubt that developers would bother with a market like the one described. Why not go to some other state/city where construction costs are low and property taxes are also low?

Blackrock is currently propping up residential property prices in Atlanta to keep the bottom from falling out of the housing market. As the "cheapest of the Big 6", once Atlanta falls, other cities will, as well.

General contractors don't just do general contracting, and it's not like tech where you can pick up and move anywhere there's internet.

Re: High property taxes are good

#410

Post by imtringued » Wed, Jul 20, 2022, 10:55 PM UTC

bko wrote: post #256

raldi wrote: post #246

Earlier quoted context omitted.

Just let property owners declare a value for their land, and give anyone the right to buy it for 120% of that value at any time, with the existing owner given a grace period where they can restate their estimate.

That sounds awful. Imagine being forced to move every few years or giving people with money that much power over you. Seems crazy that this idea is so popular. I'm guessing the people who like this idea are very young and mobile. Imagine telling grandma she has to move and sell her house and have police show up at the door when she doesn't want to. It's basically the abuses of eminent domain except done privately.

Most LVT proposals usually make concessions to owner occupied housing e.g. tax rebates if it is owner occupied. A citizen's dividend is also effectively a tax exemption for individuals instead of companies.