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This article gave me an idea. We've all read about neighborhoods being "gentrified", raising the property taxes, effectively pricing the original habitants out

This article gave me an idea. We've all read about neighborhoods being "gentrified", raising the property taxes, effectively pricing the original habitants out. I've wondered, if this ever happened to me, how could I solve the problem. Some kind of "poison pill", making the land useless to anyone else. Perhaps the solution is dividing the property and carving out a small 1 square foot section somewhere important on the property, so its land value is low enough to where anyone can afford the property taxes on it. That way, even if you're forced to sell the land, there's this little part they can't take from you that makes the rest of the land useless. I'm sure someone else has thought of this... anyone know of something like this, or other solutions to this problem?

jballanc 8y ago
It would vary from jurisdiction to jurisdiction, but generally you can't just carve up a lot willy-nilly. In order to transfer ownership of a lot, a deed must be recorded with the relevant government agency (city, county, etc.). These agencies generally have plat books recording the location and coordinates of lots so that this transfer can take place without having to send a surveyor out each time there's a transfer, and there are rules and procedures regarding how lots are recorded, modified, and updated.
- d-sc 8y ago
  Not only that. There’s usually development regulations for ‘sub divisions’ that specify minimum things like street access, utilities, etc.
Retric 8y ago
Property taxes can’t really do this if you own the property. Worst case take out an extra mortgage to pay taxes and you can stay on the same land for another 30 years without paying anything else out of pocket. Hypothetically, you can afford to pay taxes on a 100k property and it bumps to 1 million. Well now you have 900k worth of equity to pay the difference.
- Junk_Collector 8y ago
  Is your plan to die before the equity runs out? A 30 year mortgage won't cover itself more than 15 years or so because you have to pay interest. Add to that the tax you already can't afford and all you've done is trade your property for 10 years of renting it from the bank. Unless you have some external income or personal budget to cut so as to cover the difference then taxes can absolutely force you from a property you own.
  - Retric 8y ago
    You don’t need all the money up front, only 0.6% or so. Inflation is likely also increasing your equity especially on these time frames. Look into Reverse mortgage to check the math. But, again this is not the full property tax rate just the percentage you can’t afford based on an increase in value. So, sell and make a lot of money today, or stay for another 30 ish years really seems to cover just about everyone.
dmurray 8y ago
Gentrification is bad for local renters, but generally doesn't hurt the property owners, who have property that is appreciating in value. You can live there, or sell up and live a more luxurious lifestyle somewhere else. The increase in property tax won't come anywhere near cancelling out the increased equity - at worst, you could take out a line of credit on the property and pay the property taxes with that.

jballanc 8y ago

It would vary from jurisdiction to jurisdiction, but generally you can't just carve up a lot willy-nilly. In order to transfer ownership of a lot, a deed must be recorded with the relevant government agency (city, county, etc.). These agencies generally have plat books recording the location and coordinates of lots so that this transfer can take place without having to send a surveyor out each time there's a transfer, and there are rules and procedures regarding how lots are recorded, modified, and updated.

d-sc 8y ago
Not only that. There’s usually development regulations for ‘sub divisions’ that specify minimum things like street access, utilities, etc.

Retric 8y ago

Property taxes can’t really do this if you own the property. Worst case take out an extra mortgage to pay taxes and you can stay on the same land for another 30 years without paying anything else out of pocket. Hypothetically, you can afford to pay taxes on a 100k property and it bumps to 1 million. Well now you have 900k worth of equity to pay the difference.

Junk_Collector 8y ago
Is your plan to die before the equity runs out? A 30 year mortgage won't cover itself more than 15 years or so because you have to pay interest. Add to that the tax you already can't afford and all you've done is trade your property for 10 years of renting it from the bank. Unless you have some external income or personal budget to cut so as to cover the difference then taxes can absolutely force you from a property you own.
- Retric 8y ago
  You don’t need all the money up front, only 0.6% or so. Inflation is likely also increasing your equity especially on these time frames. Look into Reverse mortgage to check the math. But, again this is not the full property tax rate just the percentage you can’t afford based on an increase in value. So, sell and make a lot of money today, or stay for another 30 ish years really seems to cover just about everyone.

dmurray 8y ago

Gentrification is bad for local renters, but generally doesn't hurt the property owners, who have property that is appreciating in value. You can live there, or sell up and live a more luxurious lifestyle somewhere else. The increase in property tax won't come anywhere near cancelling out the increased equity - at worst, you could take out a line of credit on the property and pay the property taxes with that.