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No no, it's the same in the US and Canada. Wikipedia tells me it's around 1% for a £100,000 asset (in the UK). In Vancouver (Canada), I pay roughly 0.3%, so i
by jholman 16y ago
No no, it's the same in the US and Canada. Wikipedia tells me it's around 1% for a £100,000 asset (in the UK). In Vancouver (Canada), I pay roughly 0.3%, so if anything the argument is stronger in Canada.
While you were _technically_ wrong that no one taxes on the entire value of the property, I think your point still stands, because the property tax rates are so low.
I believe that, in Canada, my trade-off looks like this:
On real estate, I'd pay a very low property tax (under half a percent?) on the principle, plus capital gains on the appreciation when I sell, plus income tax on revenue from the property.
On stocks, I'd pay some combination of capital gains on sale, and whatever the tax is on dividends. So the percentage on my income is higher, but it's only on the income.
The thing is, if you're gonna pay capital gains on the "wealth" (your definition) when you cash it out, the only reason it matters you're not getting taxed on the growth is that it compounds faster. So you get to ask yourself, which compounds faster, the non-realisable asset without tax, or the realisable one with tax.
- semanticist 16y agoCouncil Tax in the UK isn't a percentage of the value of the property. It's an annual charge which varies according to the bank your property falls in. A local council sets the charge for 'band C' (I think) and the rest are calculated from that. (This then pays for rubbish collection, libraries, all that sort of stuff.) If you're buying a property as an investment, council tax isn't hugely relevant. If the property is occupied, the occupant pays it. (Unless they're exempt, like students are.) If the property is empty you don't need to pay it for up to six months. So the tax does scale according to the value of your property (ie, your wealth) and is an attempt at progressive taxation, but it's not a direct tax on that wealth. If you're buying investment property in the UK, your tax liability is going to be income tax on the income and capital gains tax if the market value of the property has risen. In addition you'll have to pay Council Tax based on the property you're living in, regardless of if you own or rent it.
- jholman 16y agoAh, thank you for the clarification, and my apologies for only reading every other word in the WP article before posting. ;) I didn't realize it was on occupied property, my bad. Based still on wikipedia, I would describe this as a regressive tax. The amount to pay increases sub-linearly with increase in the value of the thing taxed. In Canada, property tax is paid by the owner, not the occupant, and it pays for the same things (garbage collection, libraries, schools, etc).