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Counterpoint: higher property taxes force property valuations to be based closer to the “current use” value (ex, what is the value of this house based on its us
by 0xB31B1B 7y ago
Counterpoint: higher property taxes force property valuations to be based closer to the “current use” value (ex, what is the value of this house based on its use as a place where someone lives), lower property taxes allow property valuations to be based on the “speculative” price (how much will this land be worth in 40 years, regardless of how I use it now). In general, jurisdictions with low property taxes have a combination of high property values and more rundown buildings/land banking/speculative investment (where speculative investment means owning an empty lot or vacant lot in a highly productive urban area for 40 years) as the carrying costs are lower (houses are valued more on the “what will this be worth in 40 years” and less on “what is it worth for me to use this house as a house right now”)
- deogeo 7y agoThat's part of the reason for that "at least for small to reasonably large lots" exception I made. Suppose there is a tax, but it's progressive (by square-foot), so you pay ~0 for your first house, a bit more for your second, and so on up to some maximum, same as income tax. That should make speculating on the future price more costly, and so reduce speculation - a bank/investor would probably be paying the maximum tax.