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Here in NJ we're getting screwed by property taxes. 2-3% per year! Try doing that when you're out of work or on social security. Its one of the main reasons peo
by u678u 5y ago
Here in NJ we're getting screwed by property taxes. 2-3% per year! Try doing that when you're out of work or on social security. Its one of the main reasons people leave.
- Ericson2314 5y agoAre you in a single family home? If so, I have 0 sympathy. Downsize.
- erentz 5y agoNJ has the highest property tax (I think). Note it’s property tax not land value tax so while it has some effect on real estate prices it doesn’t quite create the same incentive for more efficient land use.
- nine_k 5y agoI'd say it may have an inverse effect. Build a nice house on your lot, pay a ton every year. Stay in a shack on that same lot, save a ton every year.
- Ericson2314 5y agoThe value of the land still counts towards the total property value, so it's not an inverse effect, but it does decay the more is built until there's no marginal incentive one way or the other.
- u678u 5y agoNo I'm in an 2br apartment with my wife and teenage daughter. Taxes are $1600/mo. Still cheaper than the suburbs with good schools.
- woofyman 5y agoYou’re apartment is valued at $700,000?
- closeparen 5y agoThat’s not a lot for a 2BR with a reasonable commute to New York.
- Pfhreak 5y ago$700k+ is objectively a large amount of money to spend on housing, more than double the median US home price. Even if it's a middle class home in its local market.
- closeparen 5y agoHousing is inherently local. You can't aggregate over multiple commute sheds and have your conclusion mean anything.
- Pfhreak 5y agoIs there some way to look at $700,000 and not think, "Holy shit that's a life changing amount of money for nearly any American."?
- stadium 5y agoFOMO is the biggest reason I find not to sell and rent for a while. If I want to buy again in a few years, there is no way to know if the equivalent house would be out of my price range. And I can't think of too many places I would feel safe investing that amount of money given current asset price inflation. Becoming a landlord while renting out something new may be a good option though. Or moving to a low cost of living area.
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- Ericson2314 5y agoGlad to hear you are in an apartment in the good transit part of NJ! Then a LVT is definitely in your interest as the others say. More stories => less taxes!
- minikites 5y agoDoes your comment imply that people who are out of work or on social security are better off renting? A property tax seems manageable like any other expense if you live within your means.
- photojosh 5y agoOther comments have alluded to this; but land value tax is very different from property tax in what it incentivises! Property tax just says your house is worth a lot, therefore you can obviously afford to pay a lot of tax, whereas land tax drives efficiency by encouraging density.
- seoaeu 5y agoWouldn't a purely land value tax be even more punishing? The mere fact that you are in a desirable area and could build an expensive structure on your plot would mean that you have to pay high taxes.
- Ericson2314 5y agoIf you live in an apartment in the tallest building around, you do just great. And that's the exact incentive we need.
- margalabargala 5y agoHow is land value tax not just "your land could potentially produce a lot of value, therefore you can obviously afford to pay a lot of tax"? From the perspective of the retired person on a fixed income who's lived on the same plot for 50 years while a city sprang up around them, the result is functionally the same.
- elipsey 5y agoland value tax is not assessed on the basis of who is presumed able to afford it. it's assessed against the use of a public good --- the ability of more people to live and work in the city that perhaps makes the land more valuable than when the owner bought it. also observe that the purpose of the tax is not strictly to raise revenue, but to address what would otherwise be an externalized cost and make the housing market more efficient.
- Ericson2314 5y ago> also observe that the purpose of the tax is not strictly to raise revenue, but to address what would otherwise be an externalized cost and make the housing market more efficient. In a time and place where we can deficit spend well, and more demand unlocks more growth, this should be the primary purpose of most taxation.
- cma 5y agoI guess if you aren't working over a period of years, you are just increasing commute times by occupying the densest areas and Georgism is incentivizing you to move farther out or build vertical (it's on land, not structures).
- Dracophoenix 5y agoBut how does that change the big question mark inherent to both taxes: "What's the value of the smallest defined unit of land?"
- Ericson2314 5y agoAs long as land is bought and sold, it isn't hard to assess. In the maximal form of LVT there is 0 value of owning land, the LVT becomes in effect rent to the state (which can be redistributed in a dividend to the people), and rather than assess at all land can be simply rented at at auction.
- Dracophoenix 5y ago>>As long as land is bought and sold, it isn't hard to assess. If I sell my land to someone for a dollar, does that mean the land is worth a dollar? Or is a county assessor pulling a magic number out of his hat that I would have to fight in court? I would say that so long as there isn't a dollar figure attached to the very atoms or molecules that make up the ground beneath one's feet, assessment will always be a blackbox. >>In the maximal form of LVT there is 0 value of owning land, the LVT becomes in effect rent to the state (which can be redistributed in a dividend to the people), and rather than assess at all land can be simply rented at at auction. In essence, this is Communism.
- Kbelicius 5y ago> Or is a county assessor pulling a magic number out of his hat that I would have to fight in court? Or, you know, he can look at what the land around yours is going for to determine what the LVT should be. > I would say that so long as there isn't a dollar figure attached to the very atoms or molecules that make up the ground beneath one's feet, assessment will always be a blackbox. Considering that this is true for all atoms and molecules why is it a problem in this case and not in all the other cases where we figuratively attach dollar figures to atoms or molecules? > In essence, this is Communism. I would love to hear why you think that.
- sudosteph 5y agoSeems like NJ is ranked 2nd to Illinois for states with the most debt [1]. Not coincidentally, NJ has the highest property taxes of any state, and IL has the 2nd highest [2]. It's a rough spot, but I don't think there's any tax policy that could prevent that sort of outcome when you're dealing with such a high debt burden. [1] - https://www.forbes.com/sites/andrewdepietro/2020/11/23/states-with-the-most-and-least-debt-in-2020/?sh=3b7247e78a3a https://www.forbes.com/sites/andrewdepietro/2020/11/23/state... [2] https://www.illinoispolicy.org/illinois-again-ranks-no-2-in-u-s-for-highest-property-taxes/ https://www.illinoispolicy.org/illinois-again-ranks-no-2-in-...
- lotsofpulp 5y agoYes, there's a few tax jurisdictions where the per taxpayer debt burden is a few standard deviations from the norm. https://www.truthinaccounting.org/news/detail/financial-state-of-the-states-2020 https://www.truthinaccounting.org/news/detail/financial-stat... NJ/CT/IL have $50k debt per taxpayer, and the next highest state is HI at $31k per taxpayer. And I assume those are understated amounts due to lack of laws requiring governments to perform proper calculation of present value of liabilities for deferred compensation. Some of the cities are way out of the norm too: https://www.truthinaccounting.org/news/detail/financial-state-of-the-cities-2021 https://www.truthinaccounting.org/news/detail/financial-stat... NYC: $68k Chicago: $41k The only way that works out for the average individual is if the economic growth in those places outpaces the alternatives to make up for all that debt, but I think there's a slim chance of that.
- eikenberry 5y agoLucky! Here in Portland we get the 3% per year plus nearly every election has a property based bond that always pass. Such that over the last 10 years our property taxes have more than doubled.
- caturopath 5y agoMeasure 50 is super toxic -- if the real number is 5%, it's ridiculous to limit to 3% and ensure that you never get there. It creates a system where the friction for selling a house is even higher than it already is, and where new and less-established people are paying more for the same thing as richer, more-established people.
- rcpt 5y agoTo be clear, you mean that Oregon limits property tax increases by 3% every year -- independent of property value. So if your house goes up 25% in value one year your taxes only go up 3%. No? NJ charges 2-3% assessed at current market value.
- Treblemaker 5y agoYes. > independent of property value I think the word "value" is mis-used here. The potential sale price of my home has no value at all to me unless and until I decide to sell. I pay taxes on my home based on the price I paid for it -- based on what I can afford. Neighbors coming in and paying 2x that for their houses will not change what I can afford. Is it right that my taxes should go up because of their wealth? It's not unlike changing the terms of a contract after I've signed it. And should I decide to sell, the buyers will pay taxes based on the new sale price -- based on what _they_ can afford. This seems eminently more just than people being forced to sell due to rising taxes simply because their new neighbors can afford to pay more.
- epistasis 5y agoIf you don't value your home that much, but somebody else does, then why don't you move? The reality is that you value the location, just as others value it, and you also value not having to move probably, but you don't want to pay for it. I think that you should have a right to stay where you are. And more than that, I think that everybody should have that right, be they renter or owner, as housing should be a human right. However, land is a limited resource. And by limiting its use, you stand to profit handsomely. You may not think of yourself as a land speculator, but if you profit not through your own labor but because you are manipulating access to a scarce resource, land, then that is actual speculation. If you truly do not care about the speculation and profit, and just want to keep your place and the labor you put into it, then may I suggest a compromise: you can keep your low taxes, while others pay more to support the community, as long as the increase in the value of the land is taxed at 100% at sale. Because unless you are putting labor into improving your house, any increase in value comes only from the increase in value of the land, something that you did not create, and claim that you do not even want. If you are willing to agree to this, full capture of the land value increase, then I think we can create a reasonable society. But if you insist on profiting without labor and also at the same time denying people access to something that lots of people want, I'm not sure that society can continue for much longer.
- caturopath 5y agoIf someone has high property taxes and has trouble paying them, they either (1) bought a house they couldn't actually afford, or (2) have made a lot of money on their house. For (1), that's unfortunate, but doesn't garner a lot of sympathy. For (2), we should do some rebranding where the house itself pays the taxes and no one feels pressured to take it out of their own pocket if they don't want to.
- ScottBurson 5y agoThat's an interesting way of putting it -- "the house itself pays the taxes". I guess you mean the solution I favor, which is to allow the property owner to defer some of the tax until the property is sold. I suggest that Prop. 13 in California, for example, should have limited not the growth rate of the tax, but the growth rate of the amount that actually had to be paid in a given year. The balance would be covered by a lien due at sale.
- caturopath 5y agoThis is already effectively how it works -- it's almost unheard of for a local government in California to kick someone out of their primary residence they own because of back taxes.
- sagarm 5y agoCalifornia already has a means-tested property tax postponement program: https://sco.ca.gov/ardtax_prop_tax_postponement.html https://sco.ca.gov/ardtax_prop_tax_postponement.html It should be expanded, state income tax ended, and prop 13 repealed.
- rcpt 5y agoWhy isn't the NJ Senior Freeze a sufficient solution for you?