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> Assessing land value though is actually quite easy. I agree that land taxes are ideal from an abstract point of view but strongly disagree that they are easy
by bradleyjg 6y ago
> Assessing land value though is actually quite easy.
I agree that land taxes are ideal from an abstract point of view but strongly disagree that they are easy to ascertain, particularly in cities and suburbs that are completely built out. The best an assessor can hope for are tear down sales, but even those are few and far between in a place like Manhattan.
- Glyptodon 6y agoI think they way it works is you value the potential economic activity that could occur there given neighboring economic activity and realistic development options. IE if there's a single family home in the middle of a commercial district where each property has millions of dollars in commerce a month, the property is value is assessed along those lines regardless of the current use. Then the single family owner has to sell because paying taxes on land at that valuation/rate won't make sense, and it gets redeveloped to join the commercial district.
- bradleyjg 6y agoGoing from a top down model like that is going to produce terribly inaccurate results. Property tax systems that use methodologies like that are exactly the ones that end up with the pathologies discussed in the article. Comps is the only decent—-note decent, not great—-way to do property tax assessments. (You can check model quality by looking at predicted value vs actual sales.) With land taxes there frequently are no comps and so there’s no way to get to even the decent level.