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> Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. That’s not how property taxes work. You pay them whether you make mon

by zepto 6y ago

> Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. That’s not how property taxes work. You pay them whether you make money on the house or not. You only make money on a house when you sell it. > We're talking about millionaires, not vulnerable victims. This makes no sense. Buying or owning a house doesn’t make you a millionaire. Most people take out large loans to do so, and generally their net worth goes down at the point when they do so because of the costs. Purchase prices may go up, but they also go down when the economy weakens.

caturopath 6y ago
I don't know why you think value doesn't exist until a transaction. Nonetheless, people are welcome to contest the price if it's wrong and they're welcome to sell the house and leave if they don't want to pay the tax. They're actually welcome to stay and have a lien on their house: if you're living there you aren't going to have it taken away for a property tax lien. (If they will where you are, they can fix that in the same bill that repeals property tax distortions.) > Buying or owning a house doesn’t make you a millionaire. I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires.
- pwg 6y ago
  > if you're living there you aren't going to have it taken away for a property tax lien. I don't know if that is true for CA, but in some localities, you most certainly will, eventually, be evicted from your own property for a property tax lien. It will take quite some time for the court case to wind its way to completion, but eventually the Sheriff will show up one day with an eviction notice and forcibly remove you from the property.
- zepto 6y ago
  > I don't know why you think value doesn't exist until a transaction. Value is determined by what the market actually pays, not by someone’s model of what it would pay. That isn’t the value - that is an estimate of what someone would receive if and only if they sell at that moment. Contesting an estimate doesn’t change that. Whenever prices fall, do you propose paying cash to homeowners to reimburse them for all of the overpaid taxes? Forcing someone to take a loan on a volatile asset that they can’t sell without losing their home is a brutal policy. > I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires. Ok - so you just don’t care how many other people get hurt or displaced as long as you get to take money from some millionaires?
  - deleted 6y ago
    [deleted]
pwg 6y ago
> > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. > That’s not how property taxes work. You pay them whether you make money on the house or not. > You only make money on a house when you sell it. You are correct in that you do not (yet) have cash in hand from the value increase of the property. So if one defines "make money" as "have cash in hand", no money is made until one sells the property. But, what one does have in this situation is an unrealized capital gain. And if one defines "make money" to include unrealized capital gains, then the homeowner has "made money" -- they just do not yet have cash in hand.
- zepto 6y ago
  > unrealized capital gain Unrealized is the operative word here. It means not achieved or created. An unrealized capital gain can become an unrealized loss. That’s because it’s not a real gain. Leveraging unrealized gains through loans is universally recognized as a risky investment strategy. This policy would force people to take on this risk. Which is exactly the point I’m making. Homeowners shouldn’t be forced to take on risky financial instruments that are tied to the performance of local businesses.
- lotsofpulp 6y ago
  In a discussion about paying property taxes, which must be done with cash, what purpose would it serve to define unrealized capital gains as “make money”?

by zepto 6y ago

caturopath 6y ago

I don't know why you think value doesn't exist until a transaction. Nonetheless, people are welcome to contest the price if it's wrong and they're welcome to sell the house and leave if they don't want to pay the tax. They're actually welcome to stay and have a lien on their house: if you're living there you aren't going to have it taken away for a property tax lien. (If they will where you are, they can fix that in the same bill that repeals property tax distortions.) > Buying or owning a house doesn’t make you a millionaire. I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires.

pwg 6y ago
> if you're living there you aren't going to have it taken away for a property tax lien. I don't know if that is true for CA, but in some localities, you most certainly will, eventually, be evicted from your own property for a property tax lien. It will take quite some time for the court case to wind its way to completion, but eventually the Sheriff will show up one day with an eviction notice and forcibly remove you from the property.
zepto 6y ago
> I don't know why you think value doesn't exist until a transaction. Value is determined by what the market actually pays, not by someone’s model of what it would pay. That isn’t the value - that is an estimate of what someone would receive if and only if they sell at that moment. Contesting an estimate doesn’t change that. Whenever prices fall, do you propose paying cash to homeowners to reimburse them for all of the overpaid taxes? Forcing someone to take a loan on a volatile asset that they can’t sell without losing their home is a brutal policy. > I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires. Ok - so you just don’t care how many other people get hurt or displaced as long as you get to take money from some millionaires?
- deleted 6y ago
  [deleted]

pwg 6y ago

> > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. > That’s not how property taxes work. You pay them whether you make money on the house or not. > You only make money on a house when you sell it. You are correct in that you do not (yet) have cash in hand from the value increase of the property. So if one defines "make money" as "have cash in hand", no money is made until one sells the property. But, what one does have in this situation is an unrealized capital gain. And if one defines "make money" to include unrealized capital gains, then the homeowner has "made money" -- they just do not yet have cash in hand.

zepto 6y ago
> unrealized capital gain Unrealized is the operative word here. It means not achieved or created. An unrealized capital gain can become an unrealized loss. That’s because it’s not a real gain. Leveraging unrealized gains through loans is universally recognized as a risky investment strategy. This policy would force people to take on this risk. Which is exactly the point I’m making. Homeowners shouldn’t be forced to take on risky financial instruments that are tied to the performance of local businesses.
lotsofpulp 6y ago
In a discussion about paying property taxes, which must be done with cash, what purpose would it serve to define unrealized capital gains as “make money”?