4 ms·

I'm confused. How will this make things better? Does that mean a Detroit house-owners will suddenly have to pay more taxes? Isn't Detroit barely breathing?

saxonww 3y ago
I've spent 5 minutes reading about this, but the key difference between this and regular property tax that most of us are used to (in the US anyway) is that it taxes the value of the land, irrespective of any buildings on it. So it encourages land owners to maximize the utility of land they own, vs. leaving it underdeveloped. Right now, there's less incentive to improve or repair buildings on existing land if taxes are high, since those improvements would make taxes go even higher. By tying it to the land value irrespective of improvement, the thinking is that it should encourage development. As a homeowner, this sort of thing does concern me, though. I live in a low density, single-family area. A taxing authority might decide that my area is worth more - e.g. politically if there was a push for higher density housing - and proceed to value the land higher and my taxes would go up. This might make it unappealing to own and live in the house, and I would have to leave. Of course, this is seen as the correct outcome by a lot of people.
ItsMonkk 3y ago
No. The way taxes work is first you work out how much taxes need to collect, then you work out how much weight everyone has afterwards and split it all up according to that weight. This plan plans to reduce the weight of property and more than double the weight for land. The city forecasts[0] that the average Detroit homeowner will get a 17% permanent property tax cut in 2025. 97% of all Detroit homeowners will get a tax cut. [0]: https://detroitmi.gov/departments/office-chief-financial-officer/land-value-tax-plan https://detroitmi.gov/departments/office-chief-financial-off...
- andreygrehov 3y ago
  Ok, this is rebalancing. Thanks for the explanation. This shift in 'weight' may potentially deter large developers or businesses from investing in land within the city, especially if they're looking at larger parcels for development.
  - Kalium 3y ago
    Discouraging "investing in land" is the point. Detroit struggles with stasis imposed by property speculation. Encouraging speculators to sell their assets to those who wish to develop is the goal.

saxonww 3y ago

I've spent 5 minutes reading about this, but the key difference between this and regular property tax that most of us are used to (in the US anyway) is that it taxes the value of the land, irrespective of any buildings on it. So it encourages land owners to maximize the utility of land they own, vs. leaving it underdeveloped. Right now, there's less incentive to improve or repair buildings on existing land if taxes are high, since those improvements would make taxes go even higher. By tying it to the land value irrespective of improvement, the thinking is that it should encourage development. As a homeowner, this sort of thing does concern me, though. I live in a low density, single-family area. A taxing authority might decide that my area is worth more - e.g. politically if there was a push for higher density housing - and proceed to value the land higher and my taxes would go up. This might make it unappealing to own and live in the house, and I would have to leave. Of course, this is seen as the correct outcome by a lot of people.

ItsMonkk 3y ago

No. The way taxes work is first you work out how much taxes need to collect, then you work out how much weight everyone has afterwards and split it all up according to that weight. This plan plans to reduce the weight of property and more than double the weight for land. The city forecasts[0] that the average Detroit homeowner will get a 17% permanent property tax cut in 2025. 97% of all Detroit homeowners will get a tax cut. [0]: https://detroitmi.gov/departments/office-chief-financial-officer/land-value-tax-plan https://detroitmi.gov/departments/office-chief-financial-off...

andreygrehov 3y ago
Ok, this is rebalancing. Thanks for the explanation. This shift in 'weight' may potentially deter large developers or businesses from investing in land within the city, especially if they're looking at larger parcels for development.
- Kalium 3y ago
  Discouraging "investing in land" is the point. Detroit struggles with stasis imposed by property speculation. Encouraging speculators to sell their assets to those who wish to develop is the goal.