3 ms·
If the value of the apartment is high, then it wouldn't be sold for a discount price, would it? The value might be affected by the tax, I suppose, but the pers
by tehwalrus 11y ago
If the value of the apartment is high, then it wouldn't be sold for a discount price, would it?
The value might be affected by the tax, I suppose, but the person buying it would be affected by that too when they came to sell.
Land value tax is based on the premise that if you are land-rich, you should also be "more productive" to earn the right to keep the land.
Final point; apartment buildings generally have a lower land value than you might expect given the sale price (see my other comment), with a small square footage spread over many apartments in high-rise, the tax may well be less than you expect (i.e. much of the value may be in the rebuild cost.)
- mrow84 11y agoIf the people who currently own the apartments have to sell because they are unable to afford the taxes then they would be in a poor bargaining position - they would pay for their "desire" for immediacy. Those who purchase the apartments would, therefore, be paying below the market rate (defining the market rate based solely on people's desires, without including their financial position).
- tehwalrus 11y agoImmediacy is a problem, yes. That's why at the start of a LVT people must be allowed a grace period of a couple of years to pay. Some argue for deferring such taxes until the property is sold or inherited, but that could lead to even worse situations like the one described.
- mrow84 11y agoMightn't the deferral of tax payments until newly-taxed properties are sold or inherited remove (or at least reduce) the time correlation, thus improving the market position of the sellers? Avoiding any adjustment in ownership patterns seems impossible to achieve without strong legislation, but attempting to provide adequate compensation through the market (rather than the government) seems like it might work? (question mark because I really have no idea...)
- lukasm 11y agomamon wasn't correct. Quite large number of people don't own the properties. Only 3-6% of people in Poland rent apartments. Others own the place or rent from a cooperative. During communist times local factory provided flats for the workers. After factories were closed, government formed cooperatives to manage real estate. Currently, buildings are in complicated legal state. There was one period when current tenant could purchase the property for 10% of market value, but it was blocked (possibly by developers lobby). On top of that, some buildings and land have unknown owners because of WW2. I'd love see an experiment when income tax is replaced by land and property tax.