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> In theory, property taxes should nudge people We don't have property tax in the UK. I'm frankly quite glad that we don't. If it were instituted at anything

> In theory, property taxes should nudge people We don't have property tax in the UK. I'm frankly quite glad that we don't. If it were instituted at anything other than a token rate I'd leave. If someone buys a home and lives in it, they should not have to care a single jot how it's valued externally. It is their home and their castle and they have every right to live in it. The idea that, say, my grandmother should just get kicked out of her hometown that she's lived in forever, that she bloody _built_, because a bunch of kids decided they like her city is completely absurd. Financialization needs to end somewhere. Let people earn their opt out.

scarejunba 8y ago
It's council tax.
- esotericn 8y ago
  Council tax isn't property tax because it's not percentage based. It's also not levied on the owner of the property but the occupier. The valuation of your flat could quadruple and the council tax would stay the same. I think it makes sense. Council tax pays for amenities. The rent in London might be five times higher than $insert_northern_town but it doesn't cost five times as much for the bins to be taken out.
  - scarejunba 8y ago
    It's percentage-based but against a fixed basis in the year 1991. Sort of like if everyone in California had access to a variant of Prop 13. US states usually have percentage based against a variable basis. I prefer the UK method, personally, but the US method that California uses is quite something to behold. It freezes your property tax to the date you bought your property except for a 1% change per year.
    - esotericn 8y ago
      It's not percentage based at all. There's an upper band beyond which the tax rate is fixed regardless of how much the property cost in '91. Also, see the above poster's comment for an example table: https://www.cambridge.gov.uk/council-tax-bands-and-charges https://www.cambridge.gov.uk/council-tax-bands-and-charges A 200K (assessed in '91) property pays about 2.5x what a 40K (assessed in '91) property does. Not 5x.
      - scarejunba 8y ago
        Hmm, fair enough.
- HarryHirsch 8y ago
  And it's pretty damn high: https://www.cambridge.gov.uk/council-tax-bands-and-charges https://www.cambridge.gov.uk/council-tax-bands-and-charges Someone working at the Cambridge Science Park across Kings Hedges Road might be living in Kings Hedges area and pay GBP 1500/year to the local government. It's a substantial amount.
  - djmobley 8y ago
    Compared to property prices it is a relatively small amount, and regressive in the extreme. You could own a multi-million pound property in Kensington, and the sum of taxes you pay each year would be £2,246.14 [1] [1] https://www.rbkc.gov.uk/council-tax/band-values-and-charges https://www.rbkc.gov.uk/council-tax/band-values-and-charges
    - esotericn 8y ago
      "Regressive" is a loaded term in this context. Council tax pays for services like the roads and the bins being taken out. Having an expensive house doesn't mean you use more of those. (It increases a bit up to a cap, because you probably do use them more if you have more money, but it obviously doesn't linearly scale). A flat in London might cost 5-10x a flat in the North, but both individuals use the bins and roads roughly the same amount so their council taxes are about the same.
lovich 8y ago
That would depend on if you view the land as yours completely and in all sovreignty. Or if you view it as a license for you to use exclusively until such time that society deems its worth it to take back or charge you for it. Should a few people be able to hold back economic development or relegate everyone born after them to living in the country? It's not a black and white issue when you ask the entirety of society to weigh in on it
- esotericn 8y ago
  I'm not talking about some abstract concept of "land". I'm talking about _homes_. You know, where David took his first steps, or where the swing used to be in the garden, or whatever else. I despise this abstraction, sorry. My grandmother's home in which she raised her family is not some abstract piece of "land" to be stolen from her because you think it meets some economic goal. You know full well that this idea of future individuals being relegated to 'living in the country' is complete nonsense. What you really mean is that everyone can't just pile in to the same ten or so 'alpha cities' and expect to just completely disregard those already living there.
  - lovich 8y ago
    Except that those _homes_ take up land which we are currently incapable of creating more of. It's great that your grandmother has a place with all those memories. Does that mean that everyone my age and younger is no longer allowed to live near their work, so that your grandma can reminisce when she looks around? Thats the trade-off that is happening right now, when people can make a decision 40 years ago and get to control scarce resources from that point until they die. >You know full well that this idea of future individuals being relegated to 'living in the country' is complete nonsense. I don't think that's complete nonsense at all. I live in the Boston area and the majority of people I know making over 6 figures either have roommates or a 1+ hour commute. Grandma living in a detached home on a quarter acre of land in the city means that 20+ people can not live near jobs because of the apartment building that is not there. It is a perfectly valid opinion to think that this is an acceptable trade-off, but to act like the trade-off is not happening is just sticking your head in the sand. Additionally a land value tax is not "stealing" the home from anyone. It's accepting that there are scarce resources and there needs to be a pressure to use them in the most efficient manner. If you can provide the value to keep your home on it's own, then fine you get to live there. If you can't you get to sell your highly valued home and reap the benefits of that value. That is capitalism at it's core. If Grandma thinks she should be protected from economic forces and isn't voting for socialist policies to give similar protections to others, then that's just pulling up the ladder after you which is not a viewpoint I'd give any consideration to when I vote
curun1r 8y ago
There are policies that allow for taxation while still not evicting people from their homes. For example, some states let property taxes accrue as a lien against the property that needs to be paid when the property changes ownership. This keeps people in their homes without locking in generations of the same family without compensating the public for the use of that public resource (and yes, land is a public resource of the state, regardless of some piece of paper that grants ownership to some resident. But the theory on taxation of monopoly rents is quite well fleshed out and that kind of tax has a number of positive effects on society. The fact that most of California’s housing woes can be traced back to a policy that limits this kind of tax is telling and there’s no way I’d want to live anywhere without reasonable land tax policy. That said, taxes should be based on square footage and not assessed resale value to encourage high-density building.
jldugger 8y ago
> We don't have property tax in the UK. Well, the council tax looks an awful lot like one, but if you insist. > I'm frankly quite glad that we don't. If it were instituted at anything other than a token rate I'd leave. Depends on what a 'token rate' is. Cities I've lived in have set it at around 1 percent a year, and is used to fund the emergency services, schools, roads and parks in the area. In most places in the US, that's a $1-2k annual expense. Houses around here, largely built in the 1950's, sell for around $1.4 million, and thus taxes would be around 15k a year. Complaining that you can't afford taxes on a million dollar home is perhaps the epitome of First World Problems. Moreover, higher taxation is simply one effect of high rents. Labor here is expensive; fast food joints here aggressively advertise help wanted signs at 15 dollars an hour. I can only imagine what in-home health care costs, and there's a neverending stream of interviews with public service workers who cannot afford to live near the communities they serve. However, there is a second order effect -- if a fraction of the people who felt better off in Sacramento or anywhere else in the 1k tax regions moved out, prices in SF would fall. And if owners were more directly impacted by refusals to build high density housing, they'd probably be more in favor of new construction on average. > The idea that, say, my grandmother should just get kicked out of her hometown that she's lived in forever, that she bloody _built_, because a bunch of kids decided they like her city is completely absurd. Sounds a lot like you're asking for rent control for the wealthy.
- esotericn 8y ago
  > Well, the council tax looks an awful lot like one, but if you insist. There's a post further down in which it's explained how CT is nothing like a property tax. It's levied on the occupier not the owner and it's not percentage based. It's ostensibly for services rendered e.g. bins taken out, roads etc. Your home and all the homes in your town could quadruple in externally assessed value and the absolute amount paid would remain static because it's formulated in such a way that it's paid based on relative home value within an area (rather than absolute). > Sounds a lot like you're asking for rent control for the wealthy. I'm pretty much baffled by what you mean here. My grandmother is not wealthy. Neither is my mother. Neither would they become wealthy if the town around them suddenly turned into an SF/London. The external valuation of their home that they live in would increase which is a completely different matter entirely. It's an injection of financialization into a situation where none exists. I won't be dragged in to that game, sorry.
someguydave 8y ago
In the US the property tax is balanced somewhat by mortgage subsidies deducted from income tax. Also the property tax itself is deducted from federal tax. Nevertheless I agree with you, it is a pernicious wealth tax and should rightly be moved to a VAT or sales tax.
- lotsofpulp 8y ago
  Last year’s federal tax changes greatly reduced or capped those deductions.
  - someguydave 8y ago
    Yes indeed which has made property taxes even more pernicious
conanbatt 8y ago
> If someone buys a home and lives in it, they should not have to care a single jot how it's valued externally. It is their home and their castle and they have every right to live in it. If the city puts police in the block the house is in, cleans the street, puts a bus, and a subway, maintains parks, etc etc, they are all being perpetually funded by taxes, that if the landlord is not paying, he is mooching off someone else.
- esotericn 8y ago
  We have council tax in the UK. It's just not linearly proportional to the value of the home with no cap, because that makes no sense. Cleaning the street doesn't become more expensive because your house became more expensive. Same for almost every other council-run service. In a very indirect sense, it might cost more to employ street cleaners eventually if rent increases within a 30min-1h radius, but that's not in any reasonable sense linearly proportional to the value of a home in a specific area.
  - conanbatt 8y ago
    > In a very indirect sense, it might cost more to employ street cleaners eventually if rent increases within a 30min-1h radius, but that's not in any reasonable sense linearly proportional to the value of a home in a specific area. It's very direct: the same house 100 miles away into the wilderness will not be worth nearly the same. Its construction/capital value might be more fix to the cost of materials + labor, but the value of the land is very much related to what services and other externalities affect it. In any case I'd agree that the tax shouldnt be on the value of the house, but on the value of the land it would be much more representative of the externalities.
    - esotericn 8y ago
      I think you're missing the point here. Yes, the externally assessed value of the house will vary depending on where it is. The cost of public services apportioned to the house is not linearly correlated to its' externally assessed value. If you move a suburban flat into the centre, slice it into the middle of a skyscraper say, it'd be worth way more, but it'd cost about the same to maintain the roads and take the bins out. (Actually it'd probably cost less in the city, so in that particular case the public costs would be inversely proportional to value...)
pjc50 8y ago
I've a certain amount of sympathy for this view. But you have to accept that it's building a moat to preserve the class system, at a time when people are finding homeownership harder and harder to achieve. Presumably your grandmother isn't living entirely independent of society - still reliant on social services, police, NHS and so on. Most of these are locally funded and badly paid. Plus the private sector: shop workers etc. Do you think they should be paid enough to achieve homeownership themselves? Where should that come from? The council tax capping system is ridiculous, especially in London. I would quite happily swap council tax+stamp duty for a realistic property tax. Preferably with a bit more national redistribution so we can tax mansions in Kensington to pay for buses in Burnley.
- esotericn 8y ago
  I think these things are a problem but can be solved by alternate means. We've completely stopped building council homes for no apparent reason, for example. I'd pay more in taxation to support that - hell, if we did it properly and treated it like a New Deal-style thing I'd be proud to come along and help build. We owe it to people. The fact that there are massive fields everywhere that people aren't allowed to build on because a man with a gun says no is asinine. We can make transport faster and better as well. At some point I think the population of London needs to be limited somehow because having 20 million residents would make it hellish to navigate under any system. The central bits would turn into a gridlock of pedestrians. > Do you think they should be paid enough to achieve homeownership themselves? Where should that come from? I think this gets the directionality confused. If people agree to work for a low wage, the low wage is going to persist. I think people should refuse to work jobs that don't pay enough to exist. Individually or collectively, doesn't matter. Personally I don't understand how London's service industry works at all. I'd have left yesterday if I felt my options were limited to working in the local supermarket. The wages are farcical - literally _funny_ - can't afford a studio flat within the entire M25. Meanwhile, as you know well, there are cities <5 hours drive away where one can buy a terraced house with a garden on a single minimum wage. If people refused these silly conditions, wages would rise, residents would pay a bit more for services and it'd all work out. It's funny because this is a really common (probably the overwhelming) opinion in my hometown. London is bloody expensive, no-one understands why anyone would live there unless they're rich. It's only people who have the idea that they "must" live there regardless of resources that get into trouble.

scarejunba 8y ago

It's council tax.

esotericn 8y ago
Council tax isn't property tax because it's not percentage based. It's also not levied on the owner of the property but the occupier. The valuation of your flat could quadruple and the council tax would stay the same. I think it makes sense. Council tax pays for amenities. The rent in London might be five times higher than $insert_northern_town but it doesn't cost five times as much for the bins to be taken out.
- scarejunba 8y ago
  It's percentage-based but against a fixed basis in the year 1991. Sort of like if everyone in California had access to a variant of Prop 13. US states usually have percentage based against a variable basis. I prefer the UK method, personally, but the US method that California uses is quite something to behold. It freezes your property tax to the date you bought your property except for a 1% change per year.
  - esotericn 8y ago
    It's not percentage based at all. There's an upper band beyond which the tax rate is fixed regardless of how much the property cost in '91. Also, see the above poster's comment for an example table: https://www.cambridge.gov.uk/council-tax-bands-and-charges https://www.cambridge.gov.uk/council-tax-bands-and-charges A 200K (assessed in '91) property pays about 2.5x what a 40K (assessed in '91) property does. Not 5x.
    - scarejunba 8y ago
      Hmm, fair enough.
HarryHirsch 8y ago
And it's pretty damn high: https://www.cambridge.gov.uk/council-tax-bands-and-charges https://www.cambridge.gov.uk/council-tax-bands-and-charges Someone working at the Cambridge Science Park across Kings Hedges Road might be living in Kings Hedges area and pay GBP 1500/year to the local government. It's a substantial amount.
- djmobley 8y ago
  Compared to property prices it is a relatively small amount, and regressive in the extreme. You could own a multi-million pound property in Kensington, and the sum of taxes you pay each year would be £2,246.14 [1] [1] https://www.rbkc.gov.uk/council-tax/band-values-and-charges https://www.rbkc.gov.uk/council-tax/band-values-and-charges
  - esotericn 8y ago
    "Regressive" is a loaded term in this context. Council tax pays for services like the roads and the bins being taken out. Having an expensive house doesn't mean you use more of those. (It increases a bit up to a cap, because you probably do use them more if you have more money, but it obviously doesn't linearly scale). A flat in London might cost 5-10x a flat in the North, but both individuals use the bins and roads roughly the same amount so their council taxes are about the same.

lovich 8y ago

That would depend on if you view the land as yours completely and in all sovreignty. Or if you view it as a license for you to use exclusively until such time that society deems its worth it to take back or charge you for it. Should a few people be able to hold back economic development or relegate everyone born after them to living in the country? It's not a black and white issue when you ask the entirety of society to weigh in on it

esotericn 8y ago
I'm not talking about some abstract concept of "land". I'm talking about _homes_. You know, where David took his first steps, or where the swing used to be in the garden, or whatever else. I despise this abstraction, sorry. My grandmother's home in which she raised her family is not some abstract piece of "land" to be stolen from her because you think it meets some economic goal. You know full well that this idea of future individuals being relegated to 'living in the country' is complete nonsense. What you really mean is that everyone can't just pile in to the same ten or so 'alpha cities' and expect to just completely disregard those already living there.
- lovich 8y ago
  Except that those _homes_ take up land which we are currently incapable of creating more of. It's great that your grandmother has a place with all those memories. Does that mean that everyone my age and younger is no longer allowed to live near their work, so that your grandma can reminisce when she looks around? Thats the trade-off that is happening right now, when people can make a decision 40 years ago and get to control scarce resources from that point until they die. >You know full well that this idea of future individuals being relegated to 'living in the country' is complete nonsense. I don't think that's complete nonsense at all. I live in the Boston area and the majority of people I know making over 6 figures either have roommates or a 1+ hour commute. Grandma living in a detached home on a quarter acre of land in the city means that 20+ people can not live near jobs because of the apartment building that is not there. It is a perfectly valid opinion to think that this is an acceptable trade-off, but to act like the trade-off is not happening is just sticking your head in the sand. Additionally a land value tax is not "stealing" the home from anyone. It's accepting that there are scarce resources and there needs to be a pressure to use them in the most efficient manner. If you can provide the value to keep your home on it's own, then fine you get to live there. If you can't you get to sell your highly valued home and reap the benefits of that value. That is capitalism at it's core. If Grandma thinks she should be protected from economic forces and isn't voting for socialist policies to give similar protections to others, then that's just pulling up the ladder after you which is not a viewpoint I'd give any consideration to when I vote

curun1r 8y ago

There are policies that allow for taxation while still not evicting people from their homes. For example, some states let property taxes accrue as a lien against the property that needs to be paid when the property changes ownership. This keeps people in their homes without locking in generations of the same family without compensating the public for the use of that public resource (and yes, land is a public resource of the state, regardless of some piece of paper that grants ownership to some resident. But the theory on taxation of monopoly rents is quite well fleshed out and that kind of tax has a number of positive effects on society. The fact that most of California’s housing woes can be traced back to a policy that limits this kind of tax is telling and there’s no way I’d want to live anywhere without reasonable land tax policy. That said, taxes should be based on square footage and not assessed resale value to encourage high-density building.

jldugger 8y ago

> We don't have property tax in the UK. Well, the council tax looks an awful lot like one, but if you insist. > I'm frankly quite glad that we don't. If it were instituted at anything other than a token rate I'd leave. Depends on what a 'token rate' is. Cities I've lived in have set it at around 1 percent a year, and is used to fund the emergency services, schools, roads and parks in the area. In most places in the US, that's a $1-2k annual expense. Houses around here, largely built in the 1950's, sell for around $1.4 million, and thus taxes would be around 15k a year. Complaining that you can't afford taxes on a million dollar home is perhaps the epitome of First World Problems. Moreover, higher taxation is simply one effect of high rents. Labor here is expensive; fast food joints here aggressively advertise help wanted signs at 15 dollars an hour. I can only imagine what in-home health care costs, and there's a neverending stream of interviews with public service workers who cannot afford to live near the communities they serve. However, there is a second order effect -- if a fraction of the people who felt better off in Sacramento or anywhere else in the 1k tax regions moved out, prices in SF would fall. And if owners were more directly impacted by refusals to build high density housing, they'd probably be more in favor of new construction on average. > The idea that, say, my grandmother should just get kicked out of her hometown that she's lived in forever, that she bloody _built_, because a bunch of kids decided they like her city is completely absurd. Sounds a lot like you're asking for rent control for the wealthy.

esotericn 8y ago
> Well, the council tax looks an awful lot like one, but if you insist. There's a post further down in which it's explained how CT is nothing like a property tax. It's levied on the occupier not the owner and it's not percentage based. It's ostensibly for services rendered e.g. bins taken out, roads etc. Your home and all the homes in your town could quadruple in externally assessed value and the absolute amount paid would remain static because it's formulated in such a way that it's paid based on relative home value within an area (rather than absolute). > Sounds a lot like you're asking for rent control for the wealthy. I'm pretty much baffled by what you mean here. My grandmother is not wealthy. Neither is my mother. Neither would they become wealthy if the town around them suddenly turned into an SF/London. The external valuation of their home that they live in would increase which is a completely different matter entirely. It's an injection of financialization into a situation where none exists. I won't be dragged in to that game, sorry.

someguydave 8y ago

In the US the property tax is balanced somewhat by mortgage subsidies deducted from income tax. Also the property tax itself is deducted from federal tax. Nevertheless I agree with you, it is a pernicious wealth tax and should rightly be moved to a VAT or sales tax.

lotsofpulp 8y ago
Last year’s federal tax changes greatly reduced or capped those deductions.
- someguydave 8y ago
  Yes indeed which has made property taxes even more pernicious

conanbatt 8y ago

> If someone buys a home and lives in it, they should not have to care a single jot how it's valued externally. It is their home and their castle and they have every right to live in it. If the city puts police in the block the house is in, cleans the street, puts a bus, and a subway, maintains parks, etc etc, they are all being perpetually funded by taxes, that if the landlord is not paying, he is mooching off someone else.

esotericn 8y ago
We have council tax in the UK. It's just not linearly proportional to the value of the home with no cap, because that makes no sense. Cleaning the street doesn't become more expensive because your house became more expensive. Same for almost every other council-run service. In a very indirect sense, it might cost more to employ street cleaners eventually if rent increases within a 30min-1h radius, but that's not in any reasonable sense linearly proportional to the value of a home in a specific area.
- conanbatt 8y ago
  > In a very indirect sense, it might cost more to employ street cleaners eventually if rent increases within a 30min-1h radius, but that's not in any reasonable sense linearly proportional to the value of a home in a specific area. It's very direct: the same house 100 miles away into the wilderness will not be worth nearly the same. Its construction/capital value might be more fix to the cost of materials + labor, but the value of the land is very much related to what services and other externalities affect it. In any case I'd agree that the tax shouldnt be on the value of the house, but on the value of the land it would be much more representative of the externalities.
  - esotericn 8y ago
    I think you're missing the point here. Yes, the externally assessed value of the house will vary depending on where it is. The cost of public services apportioned to the house is not linearly correlated to its' externally assessed value. If you move a suburban flat into the centre, slice it into the middle of a skyscraper say, it'd be worth way more, but it'd cost about the same to maintain the roads and take the bins out. (Actually it'd probably cost less in the city, so in that particular case the public costs would be inversely proportional to value...)

pjc50 8y ago

I've a certain amount of sympathy for this view. But you have to accept that it's building a moat to preserve the class system, at a time when people are finding homeownership harder and harder to achieve. Presumably your grandmother isn't living entirely independent of society - still reliant on social services, police, NHS and so on. Most of these are locally funded and badly paid. Plus the private sector: shop workers etc. Do you think they should be paid enough to achieve homeownership themselves? Where should that come from? The council tax capping system is ridiculous, especially in London. I would quite happily swap council tax+stamp duty for a realistic property tax. Preferably with a bit more national redistribution so we can tax mansions in Kensington to pay for buses in Burnley.

esotericn 8y ago
I think these things are a problem but can be solved by alternate means. We've completely stopped building council homes for no apparent reason, for example. I'd pay more in taxation to support that - hell, if we did it properly and treated it like a New Deal-style thing I'd be proud to come along and help build. We owe it to people. The fact that there are massive fields everywhere that people aren't allowed to build on because a man with a gun says no is asinine. We can make transport faster and better as well. At some point I think the population of London needs to be limited somehow because having 20 million residents would make it hellish to navigate under any system. The central bits would turn into a gridlock of pedestrians. > Do you think they should be paid enough to achieve homeownership themselves? Where should that come from? I think this gets the directionality confused. If people agree to work for a low wage, the low wage is going to persist. I think people should refuse to work jobs that don't pay enough to exist. Individually or collectively, doesn't matter. Personally I don't understand how London's service industry works at all. I'd have left yesterday if I felt my options were limited to working in the local supermarket. The wages are farcical - literally _funny_ - can't afford a studio flat within the entire M25. Meanwhile, as you know well, there are cities <5 hours drive away where one can buy a terraced house with a garden on a single minimum wage. If people refused these silly conditions, wages would rise, residents would pay a bit more for services and it'd all work out. It's funny because this is a really common (probably the overwhelming) opinion in my hometown. London is bloody expensive, no-one understands why anyone would live there unless they're rich. It's only people who have the idea that they "must" live there regardless of resources that get into trouble.