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High property taxes are good

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Re: High property taxes are good

#481

Post by abeppu »

throwaway_4ever wrote: post #444
abeppu wrote: post #357

Earlier quoted context omitted.

Except, while it was always rhetorically useful to talk about seniors with limited and fixed incomes being able to stay in their homes, Prop 13 also benefits people with multiple homes, landlords with rental properties, kids inheriting their parents house and running it as an AirBnb, etc. It benefits _corporations_ and non-residential property. Corporations can also skirt around it by not triggering a reassessment by…

> kids inheriting their parents house and running it as an AirBnb This doesn't exist anymore as of Prop 19. If an inherited home is not primary residence, it is taxed at full market value.

Oh, right I'm sorry, since the beginning of 2021 if you inherit a home in CA you should move into it and run your _prior_ home as an AirBnb. My understanding is you need to make it your 'primary residence' within 1 year, but it doesn't say how long it must remain your primary residence?

With the "portability" affordances for people over 55, and with the special treatment of farms, I think there's still plenty of room for heirs to receive properties with ridiculously low assessments. A savvy person trying to give the greatest tax advantage to their heirs would sell their property with the lowest assessment, and buy the most expensive property they can, make it their permanent residence, and leave it to a child or grandchild.

In combination with the special treatment for farms, I think there's plenty of room left for people to inherit property which they don't actually need, with ridiculously low assessments.

Re: High property taxes are good

#482

Post by babypuncher »

dubswithus wrote: post #452
babypuncher wrote: post #442

Earlier quoted context omitted.

I bought my starter home to live in for 5 years while I continued building my career, not to flip.

You bought it to live in for 5 years and then you flipped it for more money than you bought it? That's the definition of successful speculation.

The difference is turning a profit was not my primary motivation, owning my primary residence was. If making money was my top priority then there are several other houses I looked at that I would have bought instead.

Re: High property taxes are good

#483

Post by imtringued »

justinzollars wrote: post #47

This community is deranged. All forms of taxation are messed up, the funds end up in grifters pockets, funding wars, or in black holes. The last place I want my money is in a politicians pocket. But this community overwhelmingly supports this concept. If a slave is taxed at 100% and an indentured servant is taxed at 20% - what does that make you?

Ok, introduce a land value tax and a citizen's dividend then.

Re: High property taxes are good

#484

Post by imtringued »

naasking wrote: post #120
sudden_dystopia wrote: post #114

High property taxes are only “good” in this stupid system that we have to reduce speculation. But what would really be good is if we could stop using housing as investments that drive the prices of homes higher via inflationary mechanisms so that the prices of homes remain more stable over longer periods of time. Which is exactly how a lot of other countries housing markets work. In a better system, property taxes sh…

> But what would really be good is if we could stop using housing as investments that drive the prices of homes higher via inflationary mechanisms so that the prices of homes remain more stable over longer periods of time. Housing only becomes a good investment if supply is sufficiently limited such that demand can't be met. NIMBYism and decades of artificially low interest rates are mostly to blame here, although I…

>and decades of artificially low interest rates are mostly to blame here

You mean artificially high interest rates propped up by QE.

Re: High property taxes are good

#485

Post by jfim »

jfim wrote: post #475
CorpOverreach wrote: post #461

Earlier quoted context omitted.

So it's basically taking an interest-free home equity loan against the property, in a round-about way? You're basically de-valuing the property since whoever buys it next will have to pay a lump sum in taxes to take ownership. I guess that doesn't matter to you if you're dead. What happens if the deferred taxes exceed the cost of the house?

The estate has to pay the taxes, so they can pay the taxes and keep the property, or sell it and pay the taxes using the proceeds. I believe that interest also accrues during the deferral. I'm not sure what happens in the case where the accrued taxes exceed the value of the house, though.

Just looked it up actually: https://statutes.capitol.texas.gov/Docs/TX/htm/TX.33.htm#33....

Basically they put a tax lien on the property, they just don't collect on it while the original homeowner is occupying the property.

I'm not a lawyer, but my basic understanding of this is that if it exceeds the value of the property, the estate can just let the city/county seize the house. Otherwise, they'd need to pay the deferred taxes in order to transfer the title to the heirs.

Obviously this is not legal advice.

Re: High property taxes are good

#486

Post by danielheath »

8ytecoder wrote: post #437
danielheath wrote: post #426

Earlier quoted context omitted.

Now you need to police whether people are living in specific houses. This is simple and much harder to get wrong.

I understand it's going to hard but not impossible. Assessors can work together at the state level and identify owners with multiple properties and send them the extra tax bill or a way to dispute it. They have enough information about what we own and where we live.

Tax policies that require more than perfunctory policing are generally a bad idea IMO; tax evasion becomes a realistic option (everything from farming out properties to their extended family to "reside in" to avoid paying the higher rate to befriending assessors to have them misidentify you as a resident).

Policing is definitely possible, but I don't think the added cost and operational complexity make it advisable.

Re: High property taxes are good

#487

Post by brigandish »

chadash wrote: post #95
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.

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…

> I understand the benefits of LVT, but how do you solve this?

Georgism[1], which I'm fascinated by. One way to organise it is to ask people how much tax they're willing to pay, from which the land value can be derived (as that's the real point of assessing land value for someone who isn't willing to sell that's the real order of things). However, if someone bids on the land for that price you must sell.

> Are there any good examples of governments that use LVT in practice?

I thought there were only one or two places using LVT but it appears there are quite a few[2], but it's rarely pure LVT.

[1] https://en.wikipedia.org/wiki/Georgism

[2] https://en.wikipedia.org/wiki/Land_value_tax#Implementation

Re: High property taxes are good

#488

Post by danielheath »

8ytecoder wrote: post #401
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.

It's also desirable to nudge owner occupied properties towards efficient uses.

For instance, there's loads of large family houses being occupied by empty-nesters, while those trying to raise a young family are squashed into undersized townhouses.

Shifting the cost-base from "pay a huge mortgage and a tiny property tax" to "pay a moderate mortgage and an moderate property tax" means it's more likely to be worth the hassle of moving to a smaller house when you no longer need the space.

Re: High property taxes are good

#489

Post by lmm »

horsawlarway wrote: post #264
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.

My strong suspicion is that this will completely fuck over the elderly and marginalized communities. It also requires property owners to do EXTENSIVE research and information gathering CONSTANTLY to ensure that the number they put down is reasonable. Many of them literally can't (ex: my 87 year old Neighbor Phylis doesn't care what her house is worth, because she plans to die in it, and isn't seeking to maximize util…

> My strong suspicion is that this will completely fuck over the elderly and marginalized communities.

People who are hoarding a huge house in a desirable area to do nothing but slowly die in need to be fucked over. They're worse than speculators.

> Many of them literally can't (ex: my 87 year old Neighbor Phylis doesn't care what her house is worth, because she plans to die in it, and isn't seeking to maximize utility. Instead she wants to pass peacefully in the house she remembers raising her kids in, and has lived in for the last 50 years. She has no car, is in a wheelchair, and uses basically no online services - how is she going to go evaluate the right value for her house?).

She should quote how much someone would have to pay to make it worth her moving out - that's something she should be able to figure out for herself. If she wouldn't move for less than 3 million, quote it at 3 million.

Re: High property taxes are good

#490

Post by dntrkv »

Retric wrote: post #398
TimPC wrote: post #389

Earlier quoted context omitted.

We aren’t talking multi-level though we are talking about an actual flat parking lot in the middle of a downtown core which is what speculators do and have done in my city while they wait to sell expensive land.

To be more clear. Depending on the location, those flat parking lots can be pulling in 1+ million per year in profit. That doesn’t mean building a multi level parking garage in that same space is actually a good investment because demand isn’t unlimited. What you see as wasted space can therefore actually be a highly efficient business.

And if you built even a conservative 5 story building, it would generate significantly more value.
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