3 ms·

And bureaucrats are unable to use the market itself to help value land because?

atlantic 3y ago
Because the market price is only fixed at the moment of sale. Until then, setting the market value of a property is fairly speculative.
robertlagrant 3y ago
This measure will be harmful. Not just due to the person being a bureaucrat who can be bad at their job and/or influenced to achieve certain outcomes; not just because the info is instantly out of date on purchasing decisions; not just because the pricing info is specific to that purchaser. But because everything like this adds more drag into systems that have enough drag already. People can't do anything useful if they're constantly coping with bad systems voted for and put in place by people who don't understand unintended consequences.
- fastball 3y ago
  Again, property taxes already exist. This is simpler.
  - robertlagrant 3y ago
    As I understand it, property tax is simple when there's been a recent sale. The complexity comes from a similar issue to land value: no recent sale. In this case it's worse because valuing the land outside of what it's used for is a mess.
    - mactrey 3y ago
      But this problem already exists. Many people live in homes for 30+ years and pay property tax on the land + improvement (physical home) value. Why would it be so much harder to hypothetically value the land without a recent sale (required for a LVT) than to hypothetically value the land + improvements without a recent sale (required for property taxes which currently exist in almost every city in America)?
      - kevincox 3y ago
        Because their neighbours have sold their houses recently. So using similar sales as a baseline and then factoring in a few differences between those properties and the one that is being assessed is much easier than doing that and then subtracting the built-up value. Basically all of your data points are the built-up prices. So it is going to be easier to estimate the built-up value than the raw property value. Maybe not much easier, but definitely not harder.
        mactrey 3y ago
        Then yes, I’ll agree with that. Both can be difficult but valuing just the underlying land is harder.
  - nonethewiser 3y ago
    Do you think taxing by sub components of land would be simpler yet? Maybe we should tax by rock content. Or maybe a tax based on more things has nothing to do with complexity. The largest market is for land and structures. That makes it the simplest to value.
    - mactrey 3y ago
      There's not an argument from economic efficiency to tax by rock content.
- nonethewiser 3y ago
  > pricing info is specific to that purchaser This is a nightmare. Can you elaborate?
joncrocks 3y ago
Often the market isn't for land, but for land + property. It might help, but overall there is more room for subjectivity/untethered valuations.
sokoloff 3y ago
Is it common to sell the land without selling the improvements located on top of it? If that's common, it's straightforward to use that market to value the land.

Because the market price is only fixed at the moment of sale. Until then, setting the market value of a property is fairly speculative.

robertlagrant 3y ago

This measure will be harmful. Not just due to the person being a bureaucrat who can be bad at their job and/or influenced to achieve certain outcomes; not just because the info is instantly out of date on purchasing decisions; not just because the pricing info is specific to that purchaser. But because everything like this adds more drag into systems that have enough drag already. People can't do anything useful if they're constantly coping with bad systems voted for and put in place by people who don't understand unintended consequences.

fastball 3y ago
Again, property taxes already exist. This is simpler.
- robertlagrant 3y ago
  As I understand it, property tax is simple when there's been a recent sale. The complexity comes from a similar issue to land value: no recent sale. In this case it's worse because valuing the land outside of what it's used for is a mess.
  - mactrey 3y ago
    But this problem already exists. Many people live in homes for 30+ years and pay property tax on the land + improvement (physical home) value. Why would it be so much harder to hypothetically value the land without a recent sale (required for a LVT) than to hypothetically value the land + improvements without a recent sale (required for property taxes which currently exist in almost every city in America)?
    - kevincox 3y ago
      Because their neighbours have sold their houses recently. So using similar sales as a baseline and then factoring in a few differences between those properties and the one that is being assessed is much easier than doing that and then subtracting the built-up value. Basically all of your data points are the built-up prices. So it is going to be easier to estimate the built-up value than the raw property value. Maybe not much easier, but definitely not harder.
      - mactrey 3y ago
        Then yes, I’ll agree with that. Both can be difficult but valuing just the underlying land is harder.
- nonethewiser 3y ago
  Do you think taxing by sub components of land would be simpler yet? Maybe we should tax by rock content. Or maybe a tax based on more things has nothing to do with complexity. The largest market is for land and structures. That makes it the simplest to value.
  - mactrey 3y ago
    There's not an argument from economic efficiency to tax by rock content.
nonethewiser 3y ago
> pricing info is specific to that purchaser This is a nightmare. Can you elaborate?

joncrocks 3y ago

Often the market isn't for land, but for land + property. It might help, but overall there is more room for subjectivity/untethered valuations.

sokoloff 3y ago

Is it common to sell the land without selling the improvements located on top of it? If that's common, it's straightforward to use that market to value the land.