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High property taxes are good

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Re: High property taxes are good

#531

Post by lmm »

naasking wrote: post #127
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'm not clear on how land value taxes would incentivize the right kinds of units. For instance, would a land value tax incentivize the creation of tiny bachelor apartments, or larger apartments that families can use? We need incentives for both, and larger units are not very common these days.

The LVT is meant to stay neutral and let the market figure it out. That would probably mean more density compared to today (where lots of traditional houses take up massive amounts of space while paying artificially low tax), but if people are willing to pay a fair price for a big place then that's what will get built.

Re: High property taxes are good

#532

Post by chadash »

TimPC wrote: post #187
hammock wrote: post #174

Earlier quoted context omitted.

Difference without a meaningful distinction. Houses are bought on credit, that credit isn’t approved without an appraisal that supports the price being paid, and that appraisal is done using comps similar to a tax assessment.

My city assesses land and structure value separately as part of property taxes so having them assess just land instead seems like less work not more.

It works because they just need to come up with a total value and how it divides between land and house doesn’t matter much. My property taxes also separate out land and it puts the land at like 25% of the total value, but in reality someone would easily pay >50% for my land just to demolish the house and rebuild.

Re: High property taxes are good

#533

Post by lmm »

conductr wrote: post #351
yellowapple wrote: post #93

Earlier quoted context omitted.

Exclusionary zoning exists because of NIMBYism. NIMBYism exists because of the financial incentive to raise land values. That financial incentive exists because of a lack of taxation on land value.

Not sure I agree. Or doesn't fit with my experience/city/state. All zoning is exclusionary to my knowledge. That's the entire point. It's not necessary but it exists because it exists. And, it's sticky. It was established most likely when the entire city was raw land and undeveloped; so it served as a plan for development. There was no NIMBY because people were building their BY. Because there was a plan, you could d…

> It was established most likely when the entire city was raw land and undeveloped; so it served as a plan for development. There was no NIMBY because people were building their BY. Because there was a plan, you could decide where you wanted to build that BY.

That's not really true. Zoning was usually set up later. Often the existing buildings wouldn't be permitted by the zoning rules but were "grandfathered in". (If we made this practice illegal and insisted that you have to demolish anything that doesn't fit the new zoning laws, that might be one way to keep zoning laws sane). Even if the final state of those people's buildings is legal, often the process by which they were built wouldn't be.

> Once you have developed the land, raised family, lived in a house for decade(s), and the city around you develops and changes. Now, your property maybe better utilized as a multifamily complex or a nuclear reactor, or anything really. But, it's your home and you shouldn't be taxed out of it. Rezoning as a process is may difficult and probably should be. There's a lot of stakeholders/neighbors who are impacted by a change. They should have some say. It just so happens that those people who bought a single family house in a single family neighborhood tend to prefer it to stay that way so they get called NIMBY but it's a completely rational perspective to have if you were in their shoes.

Guess they should've had the foresight to get born earlier? It seems absurdly unfair to say that zoning set up for a population that was half the size should bind the current generation. I get that it's individually rational to want to pull the ladder up behind you, but it's disgusting. (And for the "people shouldn't be forced out of their home" crowd: my generation gets forced out of our homes every 2-3 years because we can't afford to own and have to rent. So I won't shed any tears for boomers getting forced out of their home once in several decades)

Re: High property taxes are good

#534

Post by ByersReason »

Property values for tax calculation purposes are not reassessed round here so you pay on whatever the assessed value was when your bought the property. Sounds nice, but what actually happens is that baby boomers, who bought their houses ages ago, pay essentially no tax on houses. Meanwhile, more recent residents get to foot the bill with sky high property taxes. I know people with previously purchased houses of the order or 5 (yes 5) houses that they are renting out for outrageous rents - all with very low property taxes on them. Please make the normal tax rate lower and actually tax everyone.

Re: High property taxes are good

#535

Post by seanmcdirmid »

8note wrote: post #511
seanmcdirmid wrote: post #228

Earlier quoted context omitted.

> That seems like the point, though - the land tax makes it so that it is productive to add more density. It will still force density eventually as the home's structure value depreciates (demo costs are the same no matter how much the home is worth). Any new structures will be pushed into higher value uses. BUT let's say we instituted a blind land value tax tomorrow: many people would be forced out of their homes AND…

is it a problem that some people are losers in the new scheme? there are losers in the current scheme too

It will hit people at the bottom the most, they are most likely to own under value structures, they are least likely to have funds to redevelop, and are least likely to have funds to sit things out until they can sell at a break even point. A land value tax would benefit corporations more, since they can throw up a bunch of luxury apartments to maximize value utilization to pay the land value tax. Corporations would also be able to buy out at a discount individual owners who are squeezed by the tax.

Re: High property taxes are good

#536

Post by peyton »

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…

> These genuine owners are paying high property taxes.

Not if the tax base goes down. Which is the point.

> If so, why not just get rid of speculative buying (simply make it illegal)?

This makes the lawyer rich too. It’s not a smash-and-grab at a Walgreens. You can’t put real estate cops on every deal. If price is expected to go up, people will speculate.

Re: High property taxes are good

#537

Post by vostok »

ed25519FUUU wrote: post #419
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…

> And what on earth does Chicago have to do with San Francisco or New York? This was such a laughable comparison because BOTH of these cities have high property taxes compared with more affordable cities in other states.

I think New York means NYC in this context and NYC has incredibly low property taxes. I believe it's due to a cap on maximum annual increases. New York State tends to have high property taxes on the other hand.

I'm less familiar with San Francisco, but I wouldn't be surprised if they had low property taxes due to Prop 13.

Re: High property taxes are good

#538

Post by danans »

EddieDante wrote: post #469
danans wrote: post #309

Earlier quoted context omitted.

> Corollary: the difference between a government and a warlord/organized crime syndicate is the time/money/effort spent on propaganda. Only when the government is authoritarian. You can't vote out a dictator, king, warlord, or mob boss.

I can't vote out the people who decide who gets on the ballot, either.

Maybe not at the presidential level, but you can definitely do so at the local and legislative level if you get involved in your party's local nominating committees. The alternative is running every presidential election like a California recall election, which is a famously dysfunctional process.

Re: High property taxes are good

#539

Post by antupis »

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.

Just go straight to land-value tax https://en.wikipedia.org/wiki/Land_value_tax

Re: High property taxes are good

#540

Post by brigandish »

TheMechanist wrote: post #527
brigandish wrote: post #487

Earlier quoted context omitted.

> 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…

> 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. Some people have very strange misconceptions about LVT & Georgism.

Go on, I'm happy to be corrected, less so for people to make unhelpful asides.
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