5 ms·

This is why appraisals for tax purposes should always come with the right to sell the property back to the city for 90% of this value. If you won't pay $900k fo

This is why appraisals for tax purposes should always come with the right to sell the property back to the city for 90% of this value. If you won't pay $900k for a $1m home, then it isn't a $1m home. Also, there should be carveouts (like we have in Toronto) for the elderly and disabled to have their taxes paid from the residual value of their home until they die, so our communities don't just push out our most vulnerable fifth of society when housing booms.

duxup 4y ago
Hard to imagine a local city has the funds available to just buy up property. I’m also not sure “punishing” (well now you have to buy it) local municipalities results in better governance. Also sounds like an invite for corruption. Evaluate high, sell to the city… now the locals are all on the hook.
- deleted 4y ago
  [deleted]
- mmmpop 4y ago
  > Hard to imagine a local city has the funds available to just buy up property. Hard to imagine the US government has 1.5 trillion lying around to pay people to stay home, but they figured it out.
  - amanaplanacanal 4y ago
    Unfortunately the local city can’t just print more money. I suspect they could raise property taxes instead though.
    - mmmpop 4y ago
      I'm sure they'll figure it out.
  - duxup 4y ago
    Local cities /= federal government.
- mech987 4y ago
  If the city can buy property at 90% of appraised value, they can sell to the market at true market value. As long as their appraised value is accurate, they profit from this arrangement. It provides the proper incentive to align appraisals with market value and prevents the city from exploiting its citizens.
  - SOLAR_FIELDS 4y ago
    It’s an interesting idea, a few loopholes come to mind: If the option to sell is at anytime through the year, there is the risk of city being on the hook when values tank across the board. If the exercise window is only say a month after the appraisal this risk is diminished. I could see this system being used to exploit uneducated homeowners and essentially con them into selling below market value. Not sure how to lower the risk of this one happening.
    - Cerium 4y ago
      1. I would expect the window would be the same as you have now to contest the value. Ideally nobody would exercise this right since it is essentially an SLA for government assessment quality. Everyone would rather have an assessment be consistent and slightly conservative than arbitrary and inflated. 2. I don't see the exploit? If they sell below market value then the government gets the profit.
  - telchar 4y ago
    I think you're missing the point - that system invites corruption of the appraiser. There's a nice kickback in it for someone who artificially inflates the appraisal of a worthless property and, forcing the city to buy it from the owner who is in cahoots with the appraiser. Leaving the citizens holding the bag of course.
    - Fatnino 4y ago
      That will become apparent as soon as the city is stuck holding a property it can't sell back to the open market and the appraiser will quickly find himself audited.
- iav 4y ago
  It doesn’t have to be the city. you can imagine an interesting system where instead of an appraisal, every property owner puts their own valuation and computes their own tax. The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match. You will see tax evasion go to zero immediately and enforcement cost will also be zero.
  - SOLAR_FIELDS 4y ago
    I think such a system, while good for theoretical discussion, would be ripe for all manners of abuse and problems as proposed. Perhaps in the ideal free market where everyone is equally educated on property values it might make sense. But such a reality will never exist.
  - duxup 4y ago
    > The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match. Sounds like I lost all my property rights right there…
  - kthejoker2 4y ago
    This is Henry George's land value tax, articulated well in the second greatest economics book of all time, Progress and Poverty https://en.wikipedia.org/wiki/Georgism?wprov=sfla1 https://en.wikipedia.org/wiki/Georgism?wprov=sfla1
dylan604 4y ago
I like this idea a lot. Only, I'd stipulate that the city should not have an opportunity to refuse the sell.
chrisjc 4y ago
I believe this is part of the premise on how Wealth Tax is supposed to work. While I'm not a big fan of Wealth Tax, I do think this is an idea that should/can be used across the tax system.
hnhegde 4y ago
That option is available to the elderly or disabled: https://www.star-telegram.com/opinion/bud-kennedy/article262893073.html https://www.star-telegram.com/opinion/bud-kennedy/article262... "If you’re age 65 or older or fit one of several other categories, you don’t ever have to pay the property tax on your homestead right now at all. Get a tax bill? Forget it. If you file an affidavit, your tax bill is magically delayed. Nobody collects until you move on."

duxup 4y ago

Hard to imagine a local city has the funds available to just buy up property. I’m also not sure “punishing” (well now you have to buy it) local municipalities results in better governance. Also sounds like an invite for corruption. Evaluate high, sell to the city… now the locals are all on the hook.

deleted 4y ago
[deleted]
mmmpop 4y ago
> Hard to imagine a local city has the funds available to just buy up property. Hard to imagine the US government has 1.5 trillion lying around to pay people to stay home, but they figured it out.
- amanaplanacanal 4y ago
  Unfortunately the local city can’t just print more money. I suspect they could raise property taxes instead though.
  - mmmpop 4y ago
    I'm sure they'll figure it out.
- duxup 4y ago
  Local cities /= federal government.
mech987 4y ago
If the city can buy property at 90% of appraised value, they can sell to the market at true market value. As long as their appraised value is accurate, they profit from this arrangement. It provides the proper incentive to align appraisals with market value and prevents the city from exploiting its citizens.
- SOLAR_FIELDS 4y ago
  It’s an interesting idea, a few loopholes come to mind: If the option to sell is at anytime through the year, there is the risk of city being on the hook when values tank across the board. If the exercise window is only say a month after the appraisal this risk is diminished. I could see this system being used to exploit uneducated homeowners and essentially con them into selling below market value. Not sure how to lower the risk of this one happening.
  - Cerium 4y ago
    1. I would expect the window would be the same as you have now to contest the value. Ideally nobody would exercise this right since it is essentially an SLA for government assessment quality. Everyone would rather have an assessment be consistent and slightly conservative than arbitrary and inflated. 2. I don't see the exploit? If they sell below market value then the government gets the profit.
- telchar 4y ago
  I think you're missing the point - that system invites corruption of the appraiser. There's a nice kickback in it for someone who artificially inflates the appraisal of a worthless property and, forcing the city to buy it from the owner who is in cahoots with the appraiser. Leaving the citizens holding the bag of course.
  - Fatnino 4y ago
    That will become apparent as soon as the city is stuck holding a property it can't sell back to the open market and the appraiser will quickly find himself audited.
iav 4y ago
It doesn’t have to be the city. you can imagine an interesting system where instead of an appraisal, every property owner puts their own valuation and computes their own tax. The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match. You will see tax evasion go to zero immediately and enforcement cost will also be zero.
- SOLAR_FIELDS 4y ago
  I think such a system, while good for theoretical discussion, would be ripe for all manners of abuse and problems as proposed. Perhaps in the ideal free market where everyone is equally educated on property values it might make sense. But such a reality will never exist.
- duxup 4y ago
  > The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match. Sounds like I lost all my property rights right there…
- kthejoker2 4y ago
  This is Henry George's land value tax, articulated well in the second greatest economics book of all time, Progress and Poverty https://en.wikipedia.org/wiki/Georgism?wprov=sfla1 https://en.wikipedia.org/wiki/Georgism?wprov=sfla1

dylan604 4y ago

I like this idea a lot. Only, I'd stipulate that the city should not have an opportunity to refuse the sell.

chrisjc 4y ago

I believe this is part of the premise on how Wealth Tax is supposed to work. While I'm not a big fan of Wealth Tax, I do think this is an idea that should/can be used across the tax system.

hnhegde 4y ago

That option is available to the elderly or disabled: https://www.star-telegram.com/opinion/bud-kennedy/article262893073.html https://www.star-telegram.com/opinion/bud-kennedy/article262... "If you’re age 65 or older or fit one of several other categories, you don’t ever have to pay the property tax on your homestead right now at all. Get a tax bill? Forget it. If you file an affidavit, your tax bill is magically delayed. Nobody collects until you move on."