3 ms·

In Israel, for example, a lot of land is not "sold", but leased by the state to people. In practical terms, there is no real difference. Technically speaking,

by ayende 4y ago

In Israel, for example, a lot of land is not "sold", but leased by the state to people. In practical terms, there is no real difference. Technically speaking, the lease terms are 49 / 98 years. The problem is that when you reach the end of the lease, there is no real possibility of _not_ extending the lease. And the lease is for the _land_, not anything on top of that. So it "sounds" nice, but in practical terms, it just adds another body that you have to go through. From economic perspective, there is very little difference between the two. A bank will give you a mortgage to buy a house whose "land lease" expire next year, for example. Because there is no possibility of that not being extended. There is _slight_ advantage to buying houses not leased, but mostly because that means somewhat less paperwork to go through.

ChuckNorris89 4y ago
That lease system just sounds like land ownership with extra steps.
- Retric 4y ago
  It requires active renewal which has implications. For example abandoned property is acquired by the state.
  - ejb999 4y ago
    that also happens in the USA already. There are tax auctions all the time.
    - Tangurena2 4y ago
      Some states allow the person/org who failed to pay the taxes on time to "redeem" the debt (pay it off). So this means that for several years after you acquire the property, there is a risk that it will revert to the previous owner. Some tax auctions are only for the right to collect the tax. In those states, you never can acquire ownership. You just get a lien. And some tax auctions are for worthless strips of land. I've seen some that were essentially the strip of grass between a parking lot and the street. The shopping mall had a permanent easement to put a driveway through that grass (if they wanted) and there was no possible way to make ownership of that 10 foot wide (and several hundred feet long) strip of lawn to be useful. Plus, you get to pay property taxes for something you can't live on. Tax auctions are a wild west of buyer beware.
  - code_duck 4y ago
    That’s essentially how things work in the US with property tax. If a landowner fails to pay property tax for some extended period, eventually the government will seize the property and auction it off to fulfill the tax debt.

by ayende 4y ago

ChuckNorris89 4y ago

That lease system just sounds like land ownership with extra steps.

Retric 4y ago
It requires active renewal which has implications. For example abandoned property is acquired by the state.
- ejb999 4y ago
  that also happens in the USA already. There are tax auctions all the time.
  - Tangurena2 4y ago
    Some states allow the person/org who failed to pay the taxes on time to "redeem" the debt (pay it off). So this means that for several years after you acquire the property, there is a risk that it will revert to the previous owner. Some tax auctions are only for the right to collect the tax. In those states, you never can acquire ownership. You just get a lien. And some tax auctions are for worthless strips of land. I've seen some that were essentially the strip of grass between a parking lot and the street. The shopping mall had a permanent easement to put a driveway through that grass (if they wanted) and there was no possible way to make ownership of that 10 foot wide (and several hundred feet long) strip of lawn to be useful. Plus, you get to pay property taxes for something you can't live on. Tax auctions are a wild west of buyer beware.
- code_duck 4y ago
  That’s essentially how things work in the US with property tax. If a landowner fails to pay property tax for some extended period, eventually the government will seize the property and auction it off to fulfill the tax debt.