7 ms·

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but won't be able to afford to pay the real estate tax any more.

nickthemagicman 5y ago
Once you can't afford to pay the GOVERNMENT any more because property taxes have skyrocketed out of control I'm sure a private company will be happy to swoop in and buy your house out from under you.
- digitaltrees 5y ago
  So you’d rather have an inefficient use of property that sits languishing just because some one owned it in the past? One of the benefits of taxing property is that it encourages productive use. Use it or lose it. The increasing velocity of property transfers helps increase economic activity.
  - nickthemagicman 5y ago
    Yes. I'm happy with inefficient use of our water supplies as well as our housing supply.
    - digitaltrees 5y ago
      And are you happy with the concentration of wealth and power that results in fallow land being unused, Inherited and never conveyed to someone that would actually use it?
      - nickthemagicman 5y ago
        If it's someone's FIRST and ONLY house then no taxes. Take the concept of a homestead exemption and make that for everyone's first house so people have shelter once they pay off their house that's not constantly threatened to be taken from them at the whim of government property assessors. Investment land and whatever else can be taxed.
lotsofpulp 5y ago
Property taxes do not have to go up because the assessment goes up. I have had assessments go up, but the tax rate go down because the town did not increase its budget. In the long run it probably will though, since higher land values will probably cause increases in wages and other costs. But it does not have to be proportionally as much as the land value increase.
- nickthemagicman 5y ago
  The government has a claim to your property. The government is strongly influenced by lobbyists. The government is also gerrymandered. The government always needs more money. Why would your property taxes not continue to go up endlessly?
  - CoastalCoder 5y ago
    > Why would your property taxes not continue to go up endlessly? IIUC, you're arguing that we should expect that ^^^ outcome, because of the political/economic dynamics you mentioned earlier. My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation). So it sounds like the outcome predicted by that theory probably isn't happening. Wouldn't this cast doubt on the theory?
    - dragonwriter 5y ago
      > My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation). Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing. But the discussion was about places with sustained real property value increase, so that generality is irrelevant. The scare scenario is still wrong, but for different reasons.
      - harambae 5y ago
        >Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing. Unless you're referencing the California instances in which Prop 13 protects homeowners from increases of more than 2%, I'm not sure what you mean. Nationwide property taxes increase over 5% YoY, while general inflation was far less [0] [0] https://www.marketwatch.com/story/homeowners-are-facing-the-biggest-property-tax-hikes-in-4-years-heres-where-homeowners-pay-the-most-11617899650 https://www.marketwatch.com/story/homeowners-are-facing-the-... [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...
dv_dt 5y ago
This is why CA has prop 13 which limits increases to property taxes from year to year specifically because CA had seem property boom/bust cycles kicking people out of homes because of irrational real estate prices.
- dragonwriter 5y ago
  Well, no, California has Prop 13, because wealthy investors in property used constructed images of that scenario to build support for a law to transfer more wealth to the already wealthy, not because its was a real problem (and, even if it was, Prop 13 doesn’t focus on dealing with that problem.)
  - dv_dt 5y ago
    There are problems with prop 13, but it does prevent people from being kicked out of their owned homes for temporary market conditions that are out of their control. Imho the problem was that the politics of the day got it passed to cover commercial properties too, when it really should just cover primary residences. And not secondary homes or rental properties.
    - rcpt 5y ago
      The California Tax Postponment Program prevents displacement of low income seniors and the disabled. Prop 13 is wholly unnecessary.
      - dv_dt 5y ago
        These programs often have terrible red tape and even awareness problems. They also ignore people who aren’t seniors but may be going through temporary rough spots. I prefer to have the prop 13 rules fundamentally built in an applied to all primary residences as a measure to provide a more universal stability of a home.
        rcpt 5y ago
artificialLimbs 5y ago
Arkansas has a petition going around right now to axe property taxes completely. I believe other states do not have property taxes already as well.
- tzs 5y ago
  All US states currently have property taxes [1]. [1] https://learn.roofstock.com/blog/states-without-property-tax https://learn.roofstock.com/blog/states-without-property-tax
- Spooky23 5y ago
  It's a popular notion for the redneck crowd. It never happens because it the math just doesn't work out. State/local revenues boil down to: property taxes, sales/use taxes, excise taxes, fees and income taxes. The big revenue streams are property taxes (schools, towns), sales taxes (county/state), and income taxes (state). Fees mostly sustain individual programs and have limited revenue potential - you can't make a fishing license $1000. So when you get rid of property taxes, you get rid of local control of the levy, which sounds great until Little Rock doesn't want to provide state funds to pay your football coach $200k. Even in a middle of the road state like Arkansas, the pressure to meet Medicaid and other other state program dependencies would make it difficult to fund local government. You'll have a revolt if try to levy a 20% sales tax. The talk radio answer is "shrink the government!". That means layoff cops, firemen, close schools and libraries, eliminate school sports and close public resources like parks, libraries and suspend things like street lighting. That will make reactionaries happy, but employers will leave.
  - twobitshifter 5y ago
    That makes sense but 14 states allow local governments to enact their own income taxes. This seems like an easy fix. The problem with property taxes is that they’re taxing wealth which is not creating monetary value which can be used to pay the fees.
  - no-dr-onboard 5y ago
    Your language seems a bit elitist, even for me. Nonetheless, the content of what you said seems reasonable and sound. Thank you for helping me understand this.
cpwright 5y ago
This totally depends on the jurisdiction. In NYS, your taxing authority (town, school district) has some levy that is approved. Your share of the levy is roughly your property's assessed value divided by the total assessed value of properties in that taxing jurisdiction. There are some complicating factors like when a taxing authority like a school district spans multiple assessing authorities (like a town/city); but the basic concept is sound. I was very surprised when I learned other places charge you some fixed fraction of the property value; and as that value goes up the budget of the municipality goes up.
Spooky23 5y ago
That's almost never a worry that plays out. Property taxes are usually a levy, allocated prorata based on total assessed value. If your taxes are going up dramatically as values rise, that's either a sign of issues with equalization rates (the county/town/city needs to periodically reassess), or that other areas in the jurisdiction are declining relative to value. You often see that in cities where property values often mirrors the old "redline" maps... gentrification gets you million dollar condos, but two blocks away some tenement is declining in relative value.
Cicero22 5y ago
It's a good thing that the value of your house is going up though, right? I suppose it might be upsetting to have to sell your house if it becomes too expensive, but that's a really nice problem to have imo.
- commandlinefan 5y ago
  > have to sell your house Not particularly, if every other house is too expensive for a normal person to afford.
  - rcpt 5y ago
    You do realize that once you sell the house you'll have money which can be used to buy a different house, right?
crazygringo 5y ago
I really don't see how you're complaining -- the value of your home is going up way more in absolute terms than the property tax you're paying. If you don't have cash, take out a small mortgage on the house to pay the property taxes. You'll still come out ahead in the end.
- commandlinefan 5y ago
  That was a joke, right?
  - sagarm 5y ago
    Why is it a joke? Your property value went up significantly, you are in fact a winner. Why should you get to shirk your responsibility to your community?
    - sethammons 5y ago
      re-pasting from an earlier comment of mine: I say it is unjust for a fixed income senior citizen or disability insurance recipient to have their property tax base grow to a point where they must flee their home of decades. The callus answer is to force the person to sell and take their gains and move so a younger person with higher wages can afford their once-home. I think it is unjust to remove an older, less abled, and less employment-opportunitied person from their environment.
      - crazygringo 5y ago
        You seem to have missed my original comment. Any senior citizen who owns their home (mortgage all or mostly paid off) can take out whatever size mortgage necessary to pay property taxes. Since it's backed by the house's larger value itself. Who's making them "flee their home"...? That would only happen if it's already mortgaged to the hilt, but then they're already on the verge of losing it anyways.
      - sagarm 5y ago
        They could take an loan against the unrealized gain on their asset if they'd like to continue living there. If they'd rather sell and keep the cash, that's their choice. Letting them both keep the windfall and shortchange their community doesn't make sense. In addition, California (and I suspect other states) have a means tested property tax postponement program that allows low income homeowners to defer taxes until they move out, sell, refinance, or die as a substitute for obtaining a private loan.
dragonwriter 5y ago
> This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, Actual asset values increasing aren’t a harm, and there is basically no place in the US with property taxes high enough that them increasing due to market value can possibly offset the utility (and realizable benefit) of the increase in value, even without the (common, if not usually as ridiculously low as California’s) caps on annual assessment increases that assure that properties that don’t change hands are systematically undertaxed when rapid sustained market increases occur. Modern financing provides plenty of ways to access equity, so this is very much a non-issue. Though its an issue the property-rich like to pretend is real, because it supports policy that cuts them more breaks and makes things that much worse for everyone else, e.g., CA Prop 13.
rich_sasha 5y ago
This can be fixed somewhat by excluding primary residence from such taxes (essentially a tax-free allowance of 1). This cuts at hoarding real estate as investment, is a nice extra tax on people buying second homes, and doesn't (directly) affect 99% of homeowners who only ever own one house. I'm not sure I support land taxes etc. but this at least deals with your objection.
- onlyrealcuzzo 5y ago
  So the people who live in an area shouldn't be the ones paying the taxes to support the area? Someone else should pay the taxes for them? Either your tax would come entirely from income - huge handout to homeowners / cost to non-homeonwers - regressive. OR your sales tax would be so crushing that no one would ever buy anything in your community. Or you could live in a fantasy land.
  - rich_sasha 5y ago
    If it’s sarcasm I detect in your otherwise fine post, it doesn’t add to the content. There are many ways to fund the local area. UK has explicit “council tax”, based on property value, but not as a fixed percentage, rather more linked to the percentage of the house value - so your tax bill doesn’t double just because other peoples houses appreciated. These are paid for all houses, and go to the local government. I think this is indeed one of the main sources of income for local councils. But for example for capital gains tax, which goes fully to the central government, primary residence is excluded. This means that people buying property as investments end up paying CGT but not ordinary house owners. If investment properties are rented out, it is the renters that pay council tax, as the actual inhabitants of the properties. There are so many ways to skin a rabbit with taxes, you could tailor it pretty well to discriminate between homeowners and investors.
JKCalhoun 5y ago
> My property taxes have increased 10% every year for the past several years How I know you don't live in California. You would love Prop 13 then that has capped the amount that property taxes can increase per year. Be careful though, your public schools and other services paid for by property taxes are going to suffer as the cash flow dries up....
- no-dr-onboard 5y ago
  Strange argument considering public schools (and in general _many_ public services) in CA are in terrible condition. Maybe I'm missing the point though.
  - mercutio2 5y ago
    Huh? He’s making the argument that what you observe is a direct effect of Prop 13. You may disagree, but it’s very much not a strange argument. Prop 13 kneecapped the ability for municipalities to fund themselves in the way they traditionally do in the US, and public services got vastly worse.
    - zbrozek 5y ago
      Yet somehow total tax burden for those in the state is well above other places, including those with functional public services. I wish it were easier to figure out where the money goes.
  - nradov 5y ago
    CA school funding per student is above the national median. If some schools are in terrible condition then it's due to incompetent management, not lack of funding. Conditions in my local CA public schools seem reasonably good.
    - asdff 5y ago
      CA cost of everything is above the national median, no surprise dollar spent per pupil is higher. If it were the same that would mean teachers are making significantly less and who knows what other compromises. Prop 13 changed a lot about how schools are funded (local vs state) and has lead to some challenges in certain districts relative to others, and it took decades for education funding to reach parity with pre prop 13 levels. https://www.ppic.org/content/pubs/op/OP_998JCOP.pdf https://www.ppic.org/content/pubs/op/OP_998JCOP.pdf
danans 5y ago
There is another way it hurts homeowners: the high cost of housing increases the cost of upgrading and maintaining the home you own, mostly via the construction labor market - because the workers need to pay for the roofs over their heads too. Therefore, just keeping the depreciation of your house at bay ends up becoming expensive. If you are lucky enough to enjoy DIY work like I do, you can avoid this somewhat, but the moment you need to do any major renovation that you don't have the time and skills to do yourself, it costs about the same as a purchase.
mywittyname 5y ago
Property taxes in most of america are a made up number. The county needs $X and levies Y% in property tax and the auditors use a formula to solve for $Z, which is the value of an individual home. This is exactly why, all over the country, you'll find houses that just sold for $500k which have an "appraised value" of like $120k. Property taxes are dictated by the size of $X, not really the value or volume of houses. Some areas have legislation that prevents property taxes from increasing at too fast a rate. In those regions, the formula is changed a bit so that newer residences are charged at a high initial rate.
- nomoreplease 5y ago
  > Property taxes in most of america are a made up number. Except in States that have property tax and no income tax, the appraised value is close to the sale value, usually slightly under. So in a 500k example, the appraised value is something like 450k (or more). Then your property tax might be 2% of that appraised value, which results in a $9,000 property tax bill every year, even when you retire. If speculative buying drives up the price over 10 years, it also drives up the appraised value and also your tax bill
asdff 5y ago
Depends on where you live. In CA property taxes are assessed on the appraised value of the home when you bought it. If you give the deed to your kids they can pay taxes at this rate as well. Plenty of homeowners and landlords in CA are enjoying their locked in 1976 tax rate today. It used to be you'd help your kid get a job at you or your friends company, now you just hand them the deed of the dingbat apartment your father built on the lot of your former single family home in the 1970s before that was illegal, and they are set for life without ever having to work a job again. Getting 5 units of people paying market rate for a 1 bedroom means you are making over 6 figures.
rootusrootus 5y ago
Even with the artificial constraints in many places, in the end property tax should generally be relatively independent of property value in absolute terms. E.g. in Oregon we have a 3% cap on assessed value, and that probably helped some people for a couple years early on after the law was passed, but over the longer term it doesn't really matter. The only effect assessed value has is on the size of your particular slice of the total tax revenue.

nickthemagicman 5y ago

Once you can't afford to pay the GOVERNMENT any more because property taxes have skyrocketed out of control I'm sure a private company will be happy to swoop in and buy your house out from under you.

digitaltrees 5y ago
So you’d rather have an inefficient use of property that sits languishing just because some one owned it in the past? One of the benefits of taxing property is that it encourages productive use. Use it or lose it. The increasing velocity of property transfers helps increase economic activity.
- nickthemagicman 5y ago
  Yes. I'm happy with inefficient use of our water supplies as well as our housing supply.
  - digitaltrees 5y ago
    And are you happy with the concentration of wealth and power that results in fallow land being unused, Inherited and never conveyed to someone that would actually use it?
    - nickthemagicman 5y ago
      If it's someone's FIRST and ONLY house then no taxes. Take the concept of a homestead exemption and make that for everyone's first house so people have shelter once they pay off their house that's not constantly threatened to be taken from them at the whim of government property assessors. Investment land and whatever else can be taxed.

lotsofpulp 5y ago

Property taxes do not have to go up because the assessment goes up. I have had assessments go up, but the tax rate go down because the town did not increase its budget. In the long run it probably will though, since higher land values will probably cause increases in wages and other costs. But it does not have to be proportionally as much as the land value increase.

nickthemagicman 5y ago
The government has a claim to your property. The government is strongly influenced by lobbyists. The government is also gerrymandered. The government always needs more money. Why would your property taxes not continue to go up endlessly?
- CoastalCoder 5y ago
  > Why would your property taxes not continue to go up endlessly? IIUC, you're arguing that we should expect that ^^^ outcome, because of the political/economic dynamics you mentioned earlier. My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation). So it sounds like the outcome predicted by that theory probably isn't happening. Wouldn't this cast doubt on the theory?
  - dragonwriter 5y ago
    > My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation). Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing. But the discussion was about places with sustained real property value increase, so that generality is irrelevant. The scare scenario is still wrong, but for different reasons.
    - harambae 5y ago
      >Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing. Unless you're referencing the California instances in which Prop 13 protects homeowners from increases of more than 2%, I'm not sure what you mean. Nationwide property taxes increase over 5% YoY, while general inflation was far less [0] [0] https://www.marketwatch.com/story/homeowners-are-facing-the-biggest-property-tax-hikes-in-4-years-heres-where-homeowners-pay-the-most-11617899650 https://www.marketwatch.com/story/homeowners-are-facing-the-... [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...

dv_dt 5y ago

This is why CA has prop 13 which limits increases to property taxes from year to year specifically because CA had seem property boom/bust cycles kicking people out of homes because of irrational real estate prices.

dragonwriter 5y ago
Well, no, California has Prop 13, because wealthy investors in property used constructed images of that scenario to build support for a law to transfer more wealth to the already wealthy, not because its was a real problem (and, even if it was, Prop 13 doesn’t focus on dealing with that problem.)
- dv_dt 5y ago
  There are problems with prop 13, but it does prevent people from being kicked out of their owned homes for temporary market conditions that are out of their control. Imho the problem was that the politics of the day got it passed to cover commercial properties too, when it really should just cover primary residences. And not secondary homes or rental properties.
  - rcpt 5y ago
    The California Tax Postponment Program prevents displacement of low income seniors and the disabled. Prop 13 is wholly unnecessary.
    - dv_dt 5y ago
      These programs often have terrible red tape and even awareness problems. They also ignore people who aren’t seniors but may be going through temporary rough spots. I prefer to have the prop 13 rules fundamentally built in an applied to all primary residences as a measure to provide a more universal stability of a home.
      - rcpt 5y ago

artificialLimbs 5y ago

Arkansas has a petition going around right now to axe property taxes completely. I believe other states do not have property taxes already as well.

tzs 5y ago
All US states currently have property taxes [1]. [1] https://learn.roofstock.com/blog/states-without-property-tax https://learn.roofstock.com/blog/states-without-property-tax
Spooky23 5y ago
It's a popular notion for the redneck crowd. It never happens because it the math just doesn't work out. State/local revenues boil down to: property taxes, sales/use taxes, excise taxes, fees and income taxes. The big revenue streams are property taxes (schools, towns), sales taxes (county/state), and income taxes (state). Fees mostly sustain individual programs and have limited revenue potential - you can't make a fishing license $1000. So when you get rid of property taxes, you get rid of local control of the levy, which sounds great until Little Rock doesn't want to provide state funds to pay your football coach $200k. Even in a middle of the road state like Arkansas, the pressure to meet Medicaid and other other state program dependencies would make it difficult to fund local government. You'll have a revolt if try to levy a 20% sales tax. The talk radio answer is "shrink the government!". That means layoff cops, firemen, close schools and libraries, eliminate school sports and close public resources like parks, libraries and suspend things like street lighting. That will make reactionaries happy, but employers will leave.
- twobitshifter 5y ago
  That makes sense but 14 states allow local governments to enact their own income taxes. This seems like an easy fix. The problem with property taxes is that they’re taxing wealth which is not creating monetary value which can be used to pay the fees.
- no-dr-onboard 5y ago
  Your language seems a bit elitist, even for me. Nonetheless, the content of what you said seems reasonable and sound. Thank you for helping me understand this.

cpwright 5y ago

This totally depends on the jurisdiction. In NYS, your taxing authority (town, school district) has some levy that is approved. Your share of the levy is roughly your property's assessed value divided by the total assessed value of properties in that taxing jurisdiction. There are some complicating factors like when a taxing authority like a school district spans multiple assessing authorities (like a town/city); but the basic concept is sound. I was very surprised when I learned other places charge you some fixed fraction of the property value; and as that value goes up the budget of the municipality goes up.

Spooky23 5y ago

That's almost never a worry that plays out. Property taxes are usually a levy, allocated prorata based on total assessed value. If your taxes are going up dramatically as values rise, that's either a sign of issues with equalization rates (the county/town/city needs to periodically reassess), or that other areas in the jurisdiction are declining relative to value. You often see that in cities where property values often mirrors the old "redline" maps... gentrification gets you million dollar condos, but two blocks away some tenement is declining in relative value.

Cicero22 5y ago

It's a good thing that the value of your house is going up though, right? I suppose it might be upsetting to have to sell your house if it becomes too expensive, but that's a really nice problem to have imo.

commandlinefan 5y ago
> have to sell your house Not particularly, if every other house is too expensive for a normal person to afford.
- rcpt 5y ago
  You do realize that once you sell the house you'll have money which can be used to buy a different house, right?

crazygringo 5y ago

I really don't see how you're complaining -- the value of your home is going up way more in absolute terms than the property tax you're paying. If you don't have cash, take out a small mortgage on the house to pay the property taxes. You'll still come out ahead in the end.

commandlinefan 5y ago
That was a joke, right?
- sagarm 5y ago
  Why is it a joke? Your property value went up significantly, you are in fact a winner. Why should you get to shirk your responsibility to your community?
  - sethammons 5y ago
    re-pasting from an earlier comment of mine: I say it is unjust for a fixed income senior citizen or disability insurance recipient to have their property tax base grow to a point where they must flee their home of decades. The callus answer is to force the person to sell and take their gains and move so a younger person with higher wages can afford their once-home. I think it is unjust to remove an older, less abled, and less employment-opportunitied person from their environment.
    - crazygringo 5y ago
      You seem to have missed my original comment. Any senior citizen who owns their home (mortgage all or mostly paid off) can take out whatever size mortgage necessary to pay property taxes. Since it's backed by the house's larger value itself. Who's making them "flee their home"...? That would only happen if it's already mortgaged to the hilt, but then they're already on the verge of losing it anyways.
    - sagarm 5y ago
      They could take an loan against the unrealized gain on their asset if they'd like to continue living there. If they'd rather sell and keep the cash, that's their choice. Letting them both keep the windfall and shortchange their community doesn't make sense. In addition, California (and I suspect other states) have a means tested property tax postponement program that allows low income homeowners to defer taxes until they move out, sell, refinance, or die as a substitute for obtaining a private loan.

dragonwriter 5y ago

> This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, Actual asset values increasing aren’t a harm, and there is basically no place in the US with property taxes high enough that them increasing due to market value can possibly offset the utility (and realizable benefit) of the increase in value, even without the (common, if not usually as ridiculously low as California’s) caps on annual assessment increases that assure that properties that don’t change hands are systematically undertaxed when rapid sustained market increases occur. Modern financing provides plenty of ways to access equity, so this is very much a non-issue. Though its an issue the property-rich like to pretend is real, because it supports policy that cuts them more breaks and makes things that much worse for everyone else, e.g., CA Prop 13.

rich_sasha 5y ago

This can be fixed somewhat by excluding primary residence from such taxes (essentially a tax-free allowance of 1). This cuts at hoarding real estate as investment, is a nice extra tax on people buying second homes, and doesn't (directly) affect 99% of homeowners who only ever own one house. I'm not sure I support land taxes etc. but this at least deals with your objection.

onlyrealcuzzo 5y ago
So the people who live in an area shouldn't be the ones paying the taxes to support the area? Someone else should pay the taxes for them? Either your tax would come entirely from income - huge handout to homeowners / cost to non-homeonwers - regressive. OR your sales tax would be so crushing that no one would ever buy anything in your community. Or you could live in a fantasy land.
- rich_sasha 5y ago
  If it’s sarcasm I detect in your otherwise fine post, it doesn’t add to the content. There are many ways to fund the local area. UK has explicit “council tax”, based on property value, but not as a fixed percentage, rather more linked to the percentage of the house value - so your tax bill doesn’t double just because other peoples houses appreciated. These are paid for all houses, and go to the local government. I think this is indeed one of the main sources of income for local councils. But for example for capital gains tax, which goes fully to the central government, primary residence is excluded. This means that people buying property as investments end up paying CGT but not ordinary house owners. If investment properties are rented out, it is the renters that pay council tax, as the actual inhabitants of the properties. There are so many ways to skin a rabbit with taxes, you could tailor it pretty well to discriminate between homeowners and investors.

JKCalhoun 5y ago

> My property taxes have increased 10% every year for the past several years How I know you don't live in California. You would love Prop 13 then that has capped the amount that property taxes can increase per year. Be careful though, your public schools and other services paid for by property taxes are going to suffer as the cash flow dries up....

no-dr-onboard 5y ago
Strange argument considering public schools (and in general _many_ public services) in CA are in terrible condition. Maybe I'm missing the point though.
- mercutio2 5y ago
  Huh? He’s making the argument that what you observe is a direct effect of Prop 13. You may disagree, but it’s very much not a strange argument. Prop 13 kneecapped the ability for municipalities to fund themselves in the way they traditionally do in the US, and public services got vastly worse.
  - zbrozek 5y ago
    Yet somehow total tax burden for those in the state is well above other places, including those with functional public services. I wish it were easier to figure out where the money goes.
- nradov 5y ago
  CA school funding per student is above the national median. If some schools are in terrible condition then it's due to incompetent management, not lack of funding. Conditions in my local CA public schools seem reasonably good.
  - asdff 5y ago
    CA cost of everything is above the national median, no surprise dollar spent per pupil is higher. If it were the same that would mean teachers are making significantly less and who knows what other compromises. Prop 13 changed a lot about how schools are funded (local vs state) and has lead to some challenges in certain districts relative to others, and it took decades for education funding to reach parity with pre prop 13 levels. https://www.ppic.org/content/pubs/op/OP_998JCOP.pdf https://www.ppic.org/content/pubs/op/OP_998JCOP.pdf

danans 5y ago

There is another way it hurts homeowners: the high cost of housing increases the cost of upgrading and maintaining the home you own, mostly via the construction labor market - because the workers need to pay for the roofs over their heads too. Therefore, just keeping the depreciation of your house at bay ends up becoming expensive. If you are lucky enough to enjoy DIY work like I do, you can avoid this somewhat, but the moment you need to do any major renovation that you don't have the time and skills to do yourself, it costs about the same as a purchase.

mywittyname 5y ago

Property taxes in most of america are a made up number. The county needs $X and levies Y% in property tax and the auditors use a formula to solve for $Z, which is the value of an individual home. This is exactly why, all over the country, you'll find houses that just sold for $500k which have an "appraised value" of like $120k. Property taxes are dictated by the size of $X, not really the value or volume of houses. Some areas have legislation that prevents property taxes from increasing at too fast a rate. In those regions, the formula is changed a bit so that newer residences are charged at a high initial rate.

nomoreplease 5y ago
> Property taxes in most of america are a made up number. Except in States that have property tax and no income tax, the appraised value is close to the sale value, usually slightly under. So in a 500k example, the appraised value is something like 450k (or more). Then your property tax might be 2% of that appraised value, which results in a $9,000 property tax bill every year, even when you retire. If speculative buying drives up the price over 10 years, it also drives up the appraised value and also your tax bill

asdff 5y ago

Depends on where you live. In CA property taxes are assessed on the appraised value of the home when you bought it. If you give the deed to your kids they can pay taxes at this rate as well. Plenty of homeowners and landlords in CA are enjoying their locked in 1976 tax rate today. It used to be you'd help your kid get a job at you or your friends company, now you just hand them the deed of the dingbat apartment your father built on the lot of your former single family home in the 1970s before that was illegal, and they are set for life without ever having to work a job again. Getting 5 units of people paying market rate for a 1 bedroom means you are making over 6 figures.

rootusrootus 5y ago

Even with the artificial constraints in many places, in the end property tax should generally be relatively independent of property value in absolute terms. E.g. in Oregon we have a 3% cap on assessed value, and that probably helped some people for a couple years early on after the law was passed, but over the longer term it doesn't really matter. The only effect assessed value has is on the size of your particular slice of the total tax revenue.