4 ms·

I imagine that if you live and own property there, the atmosphere is more important. Everyone likes it when their property values rise.

by Kalium 12y ago

logfromblammo 12y ago
Nope, not when property taxes are tied to property values. If you intend to stay where you are for the long term, you want your property value to stay exactly where it is. If your valuation rises, you might be forced to move by taxes. If it drops, you lose services and the place starts to get grubby.
- Kalium 12y ago
  I don't know how property taxation works in Colorado. I do know that the quirks of property taxation in California have contributed greatly to gentrification in the Bay.
- dubfan 12y ago
  > If your valuation rises, you might be forced to move by taxes. If it drops, you lose services and the place starts to get grubby. Or, if you live in SF, Seattle or Portland, your taxes go up but you still get poor quality services and everything is still grubby.
  - Kalium 12y ago
    Not SF. In California, property isn't re-assessed like it is most places.
    - fallinghawks 12y ago
      I beg to differ. I get re-assessed every year.
    - dllthomas 12y ago
      It's reassessed, but the increase is capped.
- alistairSH 12y ago
  This is true in Virginia. Property values are reassessed annually and taxes are pegged to value. If I knew for sure that I'd retire elsewhere, I'd love for values to skyrocket. But, more than likely, I'll stay in the area, so vales going up doesn't do me much good.
- trhway 12y ago
  >If you intend to stay where you are for the long term, you want your property value to stay exactly where it is. If your valuation rises, you might be forced to move by taxes. Hail the direct democracy of CA in general and Prop 13 in particular!
- YokoZar 12y ago
  Unless the marginal property tax rate is over 100%, It's almost always going to be worthwhile for the property value to go up. At the very worst you could borrow against the extra equity, pay off the tax, and recoup when you do finally sell. Or die.
  - logfromblammo 12y ago
    Think for a moment about the justice of a tax that requires someone to secure a loan in order to pay it.
    - Kalium 12y ago
      In the case of property taxes, that's a strong hint that your property is badly underutilized. That isn't an injustice. What YokoZar was describing wasn't that, though. YokoZar was describing a way to turn a profit on increasing property values.
- michaelochurch 12y ago
  Nope, not when property taxes are tied to property values. NIMBY fascists whine about property taxes because they want things both ways (see: Prop 13). That said, they usually benefit when property prices go up. Let's say that you bought a $300k house and it went up to $500k, and that your property tax rate is 1.25% (that's fairly high for the US). You're up $200k in home equity, but paying $2500 more annually in taxes. Even though interest rates are low now, you can get 2% on a 5-year CD, and possibly much higher rates in bonds or stocks. So, you come out ahead. Obviously, NIMBYs don't like to publicize the fact that they're actually making bank, because people would hate them more than they already do. A valuation drop, on the other hand, is unambiguously painful for an owner. Many of the foreclosures in 2008-10 came from people realizing that they owed more on a house than the thing was worth, so they walked away.

I imagine that if you live and own property there, the atmosphere is more important. Everyone likes it when their property values rise.

by Kalium 12y ago

I imagine that if you live and own property there, the atmosphere is more important. Everyone likes it when their property values rise.

logfromblammo 12y ago

Nope, not when property taxes are tied to property values. If you intend to stay where you are for the long term, you want your property value to stay exactly where it is. If your valuation rises, you might be forced to move by taxes. If it drops, you lose services and the place starts to get grubby.

Kalium 12y ago
I don't know how property taxation works in Colorado. I do know that the quirks of property taxation in California have contributed greatly to gentrification in the Bay.
dubfan 12y ago
> If your valuation rises, you might be forced to move by taxes. If it drops, you lose services and the place starts to get grubby. Or, if you live in SF, Seattle or Portland, your taxes go up but you still get poor quality services and everything is still grubby.
- Kalium 12y ago
  Not SF. In California, property isn't re-assessed like it is most places.
  - fallinghawks 12y ago
    I beg to differ. I get re-assessed every year.
  - dllthomas 12y ago
    It's reassessed, but the increase is capped.
alistairSH 12y ago
This is true in Virginia. Property values are reassessed annually and taxes are pegged to value. If I knew for sure that I'd retire elsewhere, I'd love for values to skyrocket. But, more than likely, I'll stay in the area, so vales going up doesn't do me much good.
trhway 12y ago
>If you intend to stay where you are for the long term, you want your property value to stay exactly where it is. If your valuation rises, you might be forced to move by taxes. Hail the direct democracy of CA in general and Prop 13 in particular!
YokoZar 12y ago
Unless the marginal property tax rate is over 100%, It's almost always going to be worthwhile for the property value to go up. At the very worst you could borrow against the extra equity, pay off the tax, and recoup when you do finally sell. Or die.
- logfromblammo 12y ago
  Think for a moment about the justice of a tax that requires someone to secure a loan in order to pay it.
  - Kalium 12y ago
    In the case of property taxes, that's a strong hint that your property is badly underutilized. That isn't an injustice. What YokoZar was describing wasn't that, though. YokoZar was describing a way to turn a profit on increasing property values.
michaelochurch 12y ago
Nope, not when property taxes are tied to property values. NIMBY fascists whine about property taxes because they want things both ways (see: Prop 13). That said, they usually benefit when property prices go up. Let's say that you bought a $300k house and it went up to $500k, and that your property tax rate is 1.25% (that's fairly high for the US). You're up $200k in home equity, but paying $2500 more annually in taxes. Even though interest rates are low now, you can get 2% on a 5-year CD, and possibly much higher rates in bonds or stocks. So, you come out ahead. Obviously, NIMBYs don't like to publicize the fact that they're actually making bank, because people would hate them more than they already do. A valuation drop, on the other hand, is unambiguously painful for an owner. Many of the foreclosures in 2008-10 came from people realizing that they owed more on a house than the thing was worth, so they walked away.