4 ms·

Even if this is provable, why not have a progressive property tax rate? Owner occupied properties can be charged half the rate of rented properties. Rather tha

Even if this is provable, why not have a progressive property tax rate? Owner occupied properties can be charged half the rate of rented properties. Rather than increase it for everyone and making it harder on the very people who are likely to sell it to a speculative investor.

danielheath 4y ago
Now you need to police whether people are living in specific houses. This is simple and much harder to get wrong.
- 8ytecoder 4y ago
  I understand it's going to hard but not impossible. Assessors can work together at the state level and identify owners with multiple properties and send them the extra tax bill or a way to dispute it. They have enough information about what we own and where we live.
  - danielheath 4y ago
    Tax policies that require more than perfunctory policing are generally a bad idea IMO; tax evasion becomes a realistic option (everything from farming out properties to their extended family to "reside in" to avoid paying the higher rate to befriending assessors to have them misidentify you as a resident). Policing is definitely possible, but I don't think the added cost and operational complexity make it advisable.
amerkhalid 4y ago
Landlords will just pass the extra tax to tenets. And mostly low income tenets will bear the cost as they are least likely to have enough money for down payment.
- danielheath 4y ago
  "We can't tax landlords, they'll make the tenants pay for it" is not how markets work. Pricing is held down by ability to pay, because - as far as landlords are concerned - getting paid some money is better than getting none. Longer term, the impact on rental costs depends on whether you think this policy would increase the amount of housing available for people to live in. Where I live, many properties are bought and kept empty - the rental income isn't worth the hassle and they are being held for capital gains. High property taxes would presumably result in some of those properties being sold to occupiers. Consider an extreme case - a land value tax of 20% (meaning you pay the government the full value of the unimproved land every 5 years). Land values would plummet, right? Lets say it were introduced over 30 years, so prices could adjust smoothly instead of crashing. What does the steady state look like after 30 years?
danielheath 4y ago
It's also desirable to nudge owner occupied properties towards efficient uses. For instance, there's loads of large family houses being occupied by empty-nesters, while those trying to raise a young family are squashed into undersized townhouses. Shifting the cost-base from "pay a huge mortgage and a tiny property tax" to "pay a moderate mortgage and an moderate property tax" means it's more likely to be worth the hassle of moving to a smaller house when you no longer need the space.
antupis 4y ago
Just go straight to land-value tax https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

danielheath 4y ago

Now you need to police whether people are living in specific houses. This is simple and much harder to get wrong.

8ytecoder 4y ago
I understand it's going to hard but not impossible. Assessors can work together at the state level and identify owners with multiple properties and send them the extra tax bill or a way to dispute it. They have enough information about what we own and where we live.
- danielheath 4y ago
  Tax policies that require more than perfunctory policing are generally a bad idea IMO; tax evasion becomes a realistic option (everything from farming out properties to their extended family to "reside in" to avoid paying the higher rate to befriending assessors to have them misidentify you as a resident). Policing is definitely possible, but I don't think the added cost and operational complexity make it advisable.

amerkhalid 4y ago

Landlords will just pass the extra tax to tenets. And mostly low income tenets will bear the cost as they are least likely to have enough money for down payment.

danielheath 4y ago
"We can't tax landlords, they'll make the tenants pay for it" is not how markets work. Pricing is held down by ability to pay, because - as far as landlords are concerned - getting paid some money is better than getting none. Longer term, the impact on rental costs depends on whether you think this policy would increase the amount of housing available for people to live in. Where I live, many properties are bought and kept empty - the rental income isn't worth the hassle and they are being held for capital gains. High property taxes would presumably result in some of those properties being sold to occupiers. Consider an extreme case - a land value tax of 20% (meaning you pay the government the full value of the unimproved land every 5 years). Land values would plummet, right? Lets say it were introduced over 30 years, so prices could adjust smoothly instead of crashing. What does the steady state look like after 30 years?

danielheath 4y ago

It's also desirable to nudge owner occupied properties towards efficient uses. For instance, there's loads of large family houses being occupied by empty-nesters, while those trying to raise a young family are squashed into undersized townhouses. Shifting the cost-base from "pay a huge mortgage and a tiny property tax" to "pay a moderate mortgage and an moderate property tax" means it's more likely to be worth the hassle of moving to a smaller house when you no longer need the space.

antupis 4y ago

Just go straight to land-value tax https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax