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Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of p
by munk-a 1y ago
Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of people breaking a law means we shouldn't have the law at all - but higher property taxes necessitate a much large spend into property value auditors and require a lot more stringency around property improvement permitting to ensure that increases in property value are captured and recorded accurately.
- calmoo 1y agoHow much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.
- CGMthrowaway 1y agoTough to measure. A couple data points: -NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage. -Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage -Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage For comparison, IRS net tax gap is about 12%
- deleted 1y ago[deleted]
- PopAlongKid 1y agoOne would expect transfer tax fraud/evasion to be an order of magnitude different from improper homestead exemptions.
- CGMthrowaway 1y agoFor sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds