WMN: t3_3hct1n_t1_cu6cn9p

[TITLE]

CMV: Property taxes should only depend on the value of the property.

[huadpe]

This is fairly straightforward. I think all real property taxes should be assessed based solely on the fair market value of the property. It should not matter what the use of the property is, or who lives there. If you own a plot with a value of $300,000, you should pay the same tax as any other owner of a plot valued at $300,000. The most egregious example against this to me is [California prop 13](https://en.wikipedia.org/wiki/California_Proposition_13_\(1978\)) which freezes property taxes when you buy a house, essentially subsidizing long-term residents at the cost of more recent arrivals. The basic reasoning for this is twofold. First, there's a fairness question, since the taxes you pay should be the same no matter who you are. In the case of property taxes, they're already progressive in as much as they depend on the fair market value of an asset you own. Second is an efficiency issue. Giving people tax abatements encourages them not to move (as in prop 13) or to not sell when they don't have good use for the property, such as [this woman who is being sued for failing to maintain a property she can't afford to renovate, but keeps paying the very low taxes on.](http://www.dnainfo.com/new-york/20150817/central-harlem/owner-of-dilapidated-landmarked-harlem-home-sued-rare-move-by-city) _____ > *Hello, users of CMV! This is a footnote from your moderators. We'd just like to remind you of a couple of things. Firstly, please remember to* ***[read through our rules](http://www.reddit.com/r/changemyview/wiki/rules)***. *If you see a comment that has broken one, it is more effective to report it than downvote it. Speaking of which,* ***[downvotes don't change views](http://www.reddit.com/r/changemyview/wiki/guidelines#wiki_upvoting.2Fdownvoting)****! If you are thinking about submitting a CMV yourself, please have a look through our* ***[popular topics wiki](http://www.reddit.com/r/changemyview/wiki/populartopics)*** *first. Any questions or concerns? Feel free to* ***[message us](http://www.reddit.com/message/compose?to=/r/changemyview)***. *Happy CMVing!*

[SilasX]

Not sure if this counts as disagreeing, but... I agree that the special carve-outs created by Prop 13 are ridiculous and distort things in all the wrong directions. But I think the *message* that voters sent with Prop 13 was eminently appropriate: it was a reaction to extreme abuse of property owners as "yet another fat pig to milk for revenues". When governments try to force that much of a burden on any particular group, it's good to set a precedent that "no, when you overreach like that, your ability to raise revenue that way has to take a hit too". Even so, 35 years is too much of a consequence to bear for excessive tax increase, so even then a phaseout makes sense.

[Account115]

It worth noting that the increase in property taxes stemmed primarily from an increase in property values, not an increase in tax rates. The increase in property values was a market phenomena.

[cacheflow]

[STA-CITE]> The basic reasoning for this is twofold. First, there's a fairness question, since the taxes you pay should be the same no matter who you are. In the case of property taxes, they're already progressive in as much as they depend on the fair market value of an asset you own. [END-CITE]If property taxes go to fund county services, and different usages of property causes a different amount of usage of public services, doesn't it make sense to link the tax to the expected cost? For example, $10 million dollars of apartment housing is likely to cost more in terms of county services (water, sewer, roads, schools, police, fire, etc) than $10 million dollars of farmland.

[vettewiz]

And how about Agriculture? Families already lose farms due to estate taxes, now you want more family farms to be lost for property taxes?

[CunninghamsLawmaker]

So? Why is that an inherently bad thing? They don't just lose the family farm, they gain millions of dollars when they sell it. Who cares if the market has changed and housing is more valued in an area where agriculture was previously economically viable. If it isn't viable anymore, why should the government lose funds to help prop them up because they don't want to leave?

[vettewiz]

People don't take money from the government. The government takes money from people to provide services. The government doesn't lose funds on agriculture because it is not providing them excess resources, they need few. Furthermore, if you raise their property taxes, their resale value will fall. The land is zoned agriculture, so it doesn't always have potential to be used for anything else.

[huadpe]

What about it? Agricultural land is being used for a business. I don't see why the family farm is any different from the family diner or the family whatever.

[vettewiz]

Agriculture uses far less municipal resources than residential or commercial properties encompassing the same area. They pay less because they use less.

[huadpe]

But we don't tax anything else like that. Low income people use far more government services than high income people, and yet we don't tax the low income people heavily, and do tax the high income people heavily. Also, we're talking about dollar value of land, not area. One acre in midtown Manhattan will pay a property tax orders of magnitudes larger than one acre of agricultural land in the upper Hudson valley.

[vettewiz]

[STA-CITE]> But we don't tax anything else like that. Low income people use far more government services than high income people, and yet we don't tax the low income people heavily, and do tax the high income people heavily. [END-CITE]The argument for why we tax high income people more is that that use more services (roads, housing, utilities etc) than low income. At least that's the theory.

[hacksoncode]

The only argument I've ever heard for taxing higher incomes at a higher *percentage* is that they can afford it. If it were merely higher use of resources, that would most likely be proportional to income.

[awa64]

[Families do not lose family farms due to estate taxes.](http://america.aljazeera.com/opinions/2015/3/the-estate-tax-isnt-destroying-family-farms.html) It's a theoretical scenario that hasn't seen an actual real-life case in decades.

[ricraze]

Some cities, particularly London, and to a lesser extent my hometown Auckland, have significant issues with wealthy foreigners buying houses which stand empty for most of the year, raising housing prices and forcing locals out of the city. This is bad for a number of reasons. It increases average commuting time, emissions, homelessness and inequality between neighbourhoods. The sense of city identity and community is reduced. And of course the limited resource which is city housing is being under-used. The free market doesn't solve in this case, because people aren't economically rational in choosing where to live, there are significant costs to moving cities (socially, time-wise, risk-wise) and also because of government interference, both in stopping people from migrating between countries freely and also in directing disproportionate funding to a few large cities. While in an ideal world I would agree with you that people whose houses appreciate beyond their ability to pay the property tax should just move out, the market cannot properly compensate for the huge interest shown by the wealthy from across the world in a few global hubs, because international labour mobility is far below what it would be in an 'economically perfect' world; and it also often can't compensate by building more houses because of geographical restrictions or existing (stupid) laws which are difficult to repeal (see San Francisco). One of the better proposals for addressing this is to charge higher property taxes on houses which are unoccupied for most of the year. This money can then be redirected towards creating more affordable housing for others in the city. It also encourages those homeowners to rent out the property for part of the year, for example to students who go home for the summer and holidays; the periods during which these houses are usually wanted. Property taxes based solely on the market value of the property won't work, because wealthy residents don't like their taxes being raised and are quite vocal about it, whereas wealthy non-residents don't get a say; and also because it'll force even more people out of the city and into lengthy commutes, while their old houses are taken by even more overseas buyers. I don't think your fairness analysis really applies here, since the government often benefits one group over others when it leads to better economic outcomes overall - see every targeted subsidy or tax ever. And since most owners of these empty houses are foreign anyway, I don't see any reason why a government has an obligation to treat them exactly the same as their own citizens; there are already plenty of differences in taxation between the two groups. This is just one example of a case in which property taxes should depend on a factor which is not just market price; I concede that the examples you've cited are probably bad, but I hope to change your view from "only" to "usually".

[huadpe]

If your city is capable of building new housing, such foreign investment is basically an unalloyed good, since it fosters new capital improvements and gives the local government a bunch of tax money without demanding government services. If your city is incapable of building housing, then it's more of an issue, but I think that's not true except for a place like Hong Kong or Singapore where the political boundaries are such that the entirety of development has to take place in a tiny area. Looking at Aukland from Google Earth, you guys have a teensy tiny CBD and a ton of single family homes like 1/2 km away. Single family homes next to the CBD are dumb and wasteful, and if you can't build multistory housing in such close proximity to downtown, that will be the driver behind soaring home prices. The Toronto area, where I'm most familiar, has been allowing enormous amounts of condo construction, which has kept housing costs down even as land prices soar. You can choose for aesthetic or cultural reasons not to allow development, but that choice is why housing isn't affordable.

[ricraze]

Okay, fair enough, Auckland isn't a great example. But you gave the delta above for the point that senior citizens have trouble moving out of their own homes when rates get too high; my (somewhat) related point is that poorer citizens (many of whom rent, and so don't benefit from a property boom) have trouble moving out of their own cities/countries when property prices get too high. Singapore and Hong Kong are in fact pretty ideal examples of this, both being crowded areas which attract the international wealthy. Would you say that harms apply there? Even London has very little room for new developments anywhere close to the city centre. "You can choose for aesthetic or cultural reasons not to allow development, but that choice is why housing isn't affordable." Yes, but given that some of those aesthetic or cultural preferences are always going to exist, then selective property taxes are a good way to mitigate them. Just identifying that "this is a reason why housing isn't affordable" solves the theoretical case of what to do if you could change anything, but given that some compromise is necessary, and society does in fact value aesthetics and culture, this is a good way in which to compromise. Particularly true when those preferences are enshrined in laws which can't really be changed (e.g. Oxford is prevented from expanding because of a 'green belt' around the city; and even if we could change laws about green belts, it might do more harm than good for other parts of the country).

[huadpe]

The "foreigners buying real estate and letting it sit empty" problem is only a problem due to lack of new construction is my point. London could add tons of new housing if it chose, but at present zoning rules limit basically the whole city to 5 floors or fewer. There are two tiny districts where skyscrapers are permitted. Toronto, with like 1/4 the population of London, has [2319 buildings over 10 stories](http://skyscraperpage.com/cities/?cityID=12&statusID=1) versus [London's 587.](http://skyscraperpage.com/cities/?cityID=807&statusID=1) And of those, Toronto's are generally much taller, with barely a handful of 40+ floor buildings in London. London's affordable housing problem is not foreigners, it is a lack of housing full stop. If London allowed housing to get built, then those foreigners would be supplying the capital that built tens of thousands of units for londoners to live in. As it is, it just fosters a bidding war over a stagnant housing supply The answer to that bidding war isn't to give a favored group special status in the bidding, but to solve the underlying problem. I don't think foreigners who want pieds a terre are inherently deserving of higher taxes in any case. They don't deserve lower taxes mind you. But I don't think the government should make moral judgments about how people use their property. I'm generally against targeted taxes and subsidies all around.

[ricraze]

That was well-argued, you've changed my view. Do I delta this, or is it only when OP's view changes?

[huadpe]

You can't award the OP a delta. You can award anyone else a delta, just not OP.

[brinz1]

Prop 13 is fair for this reason; If you buy a house for 100,000, on a street of similarly priced houses. You pay your property taxes of (idk the real value) say 1500. The next year, your neighbor sells his house for 120000 on one side and the neighbour on the other side of the street sells her house for 150000. Now the government comes in and says your house has gone up in value, it is now worth 130000 and you need to pay 2000 in taxes. You have no intention in selling the house, you havent made any more money than you did the year before and even though the value of plots around your house has gone up, you personally are not selling your house, or making any more value out of it than you did last year. Why should you pay more? (edited the numbers to be more accurate)

[huadpe]

First, let's take it down an order of magnitude on the property tax. a 15% property tax is absurdly high. 1.5% would be more reasonable. But beyond that, I don't see why two neighbors in identical houses should pay different taxes. You own the same value property, you pay the same tax. Perhaps the city could be required to not increase aggregate taxes collected past some fixed percentage a year, so they'd drop your rate to something like 1.35%, but they'd also do that for the neighbors. But fundamentally, if you're going to have a property tax, I think two people with identical properties should owe identical taxes.

[brinz1]

[STA-CITE]> But beyond that, I don't see why two neighbors in identical houses should pay different taxes. You own the same value property, you pay the same tax. [END-CITE] You paid a different amount for the property than they did. Its the same property you owned last year, it has gained value only due to the actions of other people around you.

[huadpe]

Should you likewise be ineligible for a drop in property taxes if the value of your property falls then?

[brinz1]

Look how much that screws over places. The local government turns round and realises they have less money so they end up cutting services, making the area shittier and house prices drop further

[praetorblue]

[STA-CITE]> In the case of property taxes, they're already progressive in as much as they depend on the fair market value of an asset you own. [END-CITE]That's not "progressive." Progressive means charging richer people more and poorer people less than they would pay given a linear scale. A fictional example of progressive taxes: $100k property might have no tax, $200k property might have 10% tax, and $300k property might have 40% tax. That's progressive: you give up a more-than-linear chunk as you go up the scale. It's a sort of socialism, redistributing proportionally more assets from those who can seemingly afford it, to those who can't.

[CunninghamsLawmaker]

I'm not sure I understand your view here. I agree that Prop 13 was a profoundly foolish piece of law. I don't see what this has to do with whether or not capital improvements to a plot shouldn't affect the tax burden, but I'm not sure if that's what you're suggesting.

[huadpe]

I'm not saying that improvements shouldn't matter - I'm just talking about the improved value of the land.

[CunninghamsLawmaker]

So your view is against the fixed property tax in favor of regular adjustment based on market value, correct? Devils advocate argument is that older people have fixed incomes whereas continuously increasing property values put a disproportionate burden on retirees. For the record, I think if you own property and can't afford the taxes that means you are obliged to sell the property and move somewhere you can afford. Enough people feel that this is too heartless a point of view when applied to the elderly so we have stuff like tax breaks and abatement.

[hacksoncode]

There are some essentially interests of fairness here. Someone that lives in a property they own is not *responsible* for absurd bubble housing price increases created almost *entirely* by speculators, the speculators are responsible for those. There's also no real argument that I can think of as to why governments should get a windfall because of this speculation, especially at the hands of the majority of people not responsible for the bubble. Does housing prices going up change the amount of services that government needs to provide? Not at all. It changes, to a degree, how *expensive* some of those services are to provide, because cost of living might increase for new public servants moving to the state, but again, the people benefiting from this are largely the speculators that drive up the prices. Until and unless someone actually *sells* their house, they profit in no way from these increased theoretical prices. Indeed, there's really no fair way to set the "market price" of a property except to sell it. Until that happens, the supposed increased "market value" is entirely a matter of speculation.

[cacheflow]

[STA-CITE]> First, there's a fairness question, since the taxes you pay should be the same no matter who you are [END-CITE]Governments regularly use taxes to encourage or discourage certain behaviors. For example, in my town, there is a property tax credit to encourage owner-occupied housing (vs. a rental property or a vacation home). There are also certain property tax credits to various industries. That's not a tax on "who you are", that is a tax on your behavior. [STA-CITE]> In the case of property taxes, they're already progressive in as much as they depend on the fair market value of an asset you own. [END-CITE]Property taxes are generally not progressive, they are a flat tax on the value of the property. I'm not aware of any state that taxes you at a higher rate for more valuable property.

[KuulGryphun]

[STA-CITE]> First, there's a fairness question, since the taxes you pay should be the same no matter who you are. In the case of property taxes, they're already progressive in as much as they depend on the fair market value of an asset you own. [END-CITE]That's not progressive, though. That's just linear. Progressive would mean the amount of tax owed increases proportionately faster than the value of the property. "Fairness" is a hard concept to nail down - you probably wouldn't consider a linear income tax to be fair. [STA-CITE]> Second is an efficiency issue. Giving people tax abatements encourages them not to move (as in prop 13) or to not sell when they don't have good use for the property, such as this woman who is being sued for failing to maintain a property she can't afford to renovate, but keeps paying the very low taxes on. [END-CITE]I think the obvious competing interest here is that you don't want to, effectively, kick people out of their long-term homes because it so happens that the housing area around them became more expensive. What do you say to this?

[2_Suns]

[STA-CITE]>you probably wouldn't consider a linear income tax to be fair. [END-CITE] Yes I would

[KuulGryphun]

Why?

[huadpe]

[STA-CITE]>That's not progressive, though. That's just linear. Progressive would mean the amount of tax owed increases proportionately faster than the value of the property. "Fairness" is a hard concept to nail down - you probably wouldn't consider a linear income tax to be fair. [END-CITE]That's a valid point, but I think in the case of real property it's defensible, especially because real property ownership is not a necessity in the way having some level of income is. I'll also point out that most municipalities put very hefty extra taxes on rental properties, which is highly regressive. [STA-CITE]>I think the obvious competing interest here is that you don't want to, effectively, kick people out of their long-term homes because it so happens that the housing area around them became more expensive. What do you say to this? [END-CITE]I say that the economics surrounding kicking them out if they're not willing or able to pay are pretty sound. Things like prop 13 calcify the housing market and make it prohibitively expensive for new residents to move in. I don't think a prospective new resident should be treated differently from an old resident. I don't think having lived somewhere a long time gives you a special right to remain living there as opposed to some other person.

[619shepard]

So how would you settle the issue around Jerusalem? Honestly though, if you buy a property that is in your affordability range (lets take E Palo Alto for example since you mention CA) which then doubles in value, or quadruples or some other outrageous growth you shouldn't have the ability to continue to live there? Even if you have made your life revolve around living there?

[RustyRook]

[STA-CITE]> I don't think having lived somewhere a long time gives you a special right to remain living there as opposed to some other person. [END-CITE]In the current world, I think that prospective new owners aren't always on an equal platform as older, local buyers. You live in Mississauga so you'll have seen first hand the decoupling of rate of increase of property prices and the rate of increase of real wages. A globalized market allows international buyers to enter the market and buy homes as investments, the same homes that locals are looking to buy. I'm really not demonizing international buyers, but just saying that your view hasn't yet taken the decoupling into account. It's a tricky situation...and I don't know how to resolve it or whether it's even possible. More to your view, I can't find information relating to taxes for the property in Harlem. It may or may not be fixed, I haven't yet found a source. It doesn't seem that something like Prop 13 applies to it. The property was also purchased before the buildings were [designated as city landmarks.](http://www.nylandmarks.org/about_us/greatest_accomplishments/astor_row/)

[huadpe]

I don't think the rate of increase in housing prices has outpaced income in Mississauga. I think the rate of increase of *land* prices has outpaced income, but that's to be expected since land is basically a finite resource. But we're putting up towers by the dozen, and the cost of an apartment has been pretty steady the past decade or so. Up a bit, but in line with wage increases. I think this policy would be great for Mississauga so that [things like this don't happen.](http://www.thestar.com/news/gta/2014/05/31/mississaugas_last_family_farm_hangs_on.html) The sentiment in that article is what I'm against. Those people own somewhere like $30-40 million worth of land, which would be able to be turned into housing for hundreds or thousands of people, or businesses that employ hundreds or thousands of people. The article cites a 75 acre lot adjacent which sold for $45 million and which now hosts warehouses and other industrial firms. Their lot is 52 acres. There are an enormous number of people's lives who would be massively better off if they sold. If they're going to hold onto that farm for sentimental reasons, they should have to pay the tax that represents the fair value of the resource they're using. As to foreign buyers, I'm not so concerned. Their capital is getting new housing built, which ultimately is not sitting vacant. If an investor from China buys condos which make a tower go up, and then rents them out, I don't see that as meaningfully different from an investor from Quebec or a publicly traded firm like a REIT doing the same.

[RustyRook]

Interesting example about the "last farm in Mississauga." While I understand your point about the increased economic activity that could result if the farm were sold, they are under no obligation to do so either. [STA-CITE]> I don't think the rate of increase in housing prices has outpaced income in Mississauga. [END-CITE]I'm curious: Is it also true in Toronto? I keep hearing about the massive numbers of empty condos, but I can never find really credible research that has helped me clear up the issue. Although it's outside the scope of the CMV, could you help me out by providing some info about the matter if you know of any? It would help me with the concerns about foreign investments. If the condos are being rented out successfully, then it's all great.

[huadpe]

[STA-CITE]>Interesting example about the "last farm in Mississauga." While I understand your point about the increased economic activity that could result if the farm were sold, they are under no obligation to do so either. [END-CITE]I'm not saying they're under an obligation, but if they sold, the property tax would probably go up tenfold overnight when the land went from agricultural to commercial use. If they are willing to pay the true tax that the land should be paying, then they can sit on it as long as they like. [STA-CITE]>I'm curious: Is it also true in Toronto? I keep hearing about the massive numbers of empty condos, but I can never find really credible research that has helped me clear up the issue. Although it's outside the scope of the CMV, could you help me out by providing some info about the matter if you know of any? It would help me with the concerns about foreign investments. If the condos are being rented out successfully, then it's all great. [END-CITE]So this is an area where the stats are really hard to come by. First, we don't know who owns the condos in any systematic way. Harper made a campaign promise to study this, but as of right now, it's not really known. Vacancies are up in Toronto recently, though that could be because of the recession. As far as prices to income, the best I could find was [this](http://creastats.crea.ca/treb/mls/mls05_median.htm#anchor04) and [this.](http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm) The median condo apartment went from about 250k to about 300k in the period from 2009 to 2013, when the median income went from 66,700 to 72,800. So condo apartment prices outpaced incomes by a little, but not a lot. That's also a bit incomplete because the condo data are for the city of Toronto only, whereas the census data are for the entire GTA. My understanding from anecdotal data (which isn't worth much) is that the foreign investor pieds a terre seem to just be in ultra luxury buildings, and that the workaday condo towers going up all over, especially in non-prestige areas like Mississauga are not getting large foreign investment numbers. I thought you were west coast btw, at least from your mod application. Vancouver area?

[cacheflow]

[STA-CITE]> but if they sold, the property tax would probably go up tenfold overnight when the land went from agricultural to commercial use [END-CITE]Only if the local government also rezoned the land for large commercial use. If the land continues to be zoned for light agricultural use, then the property value wouldn't go up. Do you think governments should be able to encourage the type of land use in their areas, either by property taxes or zoning?

[huadpe]

To answer your question more broadly, I think the tax should be the same regardless of zoning. I don't think residential use is more or less important than commercial, or agricultural, or mixed use.

[cacheflow]

But your original CMV was that the taxes should depend on the value of the property. The value of the land is directly connected to its zoning. People will pay more for land depending on its zoning (and the zoning of nearby land)

[huadpe]

Well, yes. I am just saying if the rate is 1.25% for residential, it should be 1.25% for commercial too. I understand that zoning or a bus route, or sewers, or a zillion other municipal services and decisions can impact land values. Maybe you have something to CMV there, but I'm not seeing it yet?

[huadpe]

This gets a little specific to Ontario, but I believe that if they sold the farm (literally, not figuratively) the Ontario Municipal Board, which is the province-wide zoning appeals board, would force it to be rezoned to commercial or residential, since that's how literally all other land in Mississauga is zoned. The OMB generally requires municipalities not to make special carve outs and exceptions for people.

[KuulGryphun]

[STA-CITE]> I'll also point out that most municipalities put very hefty extra taxes on rental properties, which is highly regressive. [END-CITE]This isn't regressive. A regressive property tax would mean only one thing - that the tax owed increases proportionately slower than the value of the property. It might be some definition of "effectively regressive" if rental properties tend to be owned by poorer people. I doubt this is the case either. [STA-CITE]> I say that the economics surrounding kicking them out if they're not willing or able to pay are pretty sound. [END-CITE]I don't think it is a given that the economy would be better without prop-13-like laws. [STA-CITE]> I don't think having lived somewhere a long time gives you a special right to remain living there as opposed to some other person. [END-CITE]Society has decided that current occupants do have a special right to continue living where they do. For example, apartment tenants have to be given advanced notice and then formally evicted in civil proceedings before they are kicked out, even if they are failing to pay rent. Rent-controlled apartments exist in many cities to try and ensure that current occupants aren't kicked out of their homes. Even squatters have some rights - simply by living somewhere, without having any explicit legal relationship with their location, they gain some (though minimal) rights. I think this is the more desirable world, where occupants have some rights and can expect to be able to continue living where they do. Buying a home is an enormous financial commitment, and you might be committing yourself to 30 years of mortgage payments. Homes are often so valuable that an individual can't expect to buy a home *without* a very long term commitment to making payments. So, since people are being forced to make these long term commitments to own a home, individuals would be forced to absorb the risk of how the area might change over those 30 years. But nobody can predict what will happen in those 30 years: Firstly, expecting an individual to absorb significant risk like this will often lead to destitute individuals. The state will then be on the hook for supporting them. Secondly, even for individuals who plan accordingly and save extra money in the event that property taxes are going to increase down the road, the economy is now being hampered by individuals who are over-saving. Thirdly, there is the moral case that people will be kicked out of their homes through no fault of their own. The value of their home has no significance to long-term occupants who plan to live the rest of their life there, and yet the increasing value of their home is what is going to get them kicked out. There is something sinister about this - these long-term homeowners are kicked out precisely because other people started coveting it. So, it seems to me a sensible solution is to have society at large absorb some of this risk. It's very similar to what we've done with healthcare - everyone needs healthcare, and individual health is inherently risky, so we make society at large absorb some of the risk.

[KJAWolf]

[STA-CITE]> Thirdly, there is the moral case that people will be kicked out of their homes through no fault of their own. The value of their home has no significance to long-term occupants who plan to live the rest of their life there, and yet the increasing value of their home is what is going to get them kicked out [END-CITE]But the cost of the services being provided in exchange for the property taxes are going up. Water treatment, police services, hospital care all have inflating costs.

[KuulGryphun]

Prop 13 specifically allows for increases in property taxes based on the rate of inflation. Its purpose is to curb rapid increases due to effects such as gentrification, but not keep it from increasing at all.

[huadpe]

[STA-CITE]>This isn't regressive. A regressive property tax would mean only one thing - that the tax owed increases proportionately slower than the value of the property. It might be some definition of "effectively regressive" if rental properties tend to be owned by poorer people. I doubt this is the case either. [END-CITE]This gets to a question of tax incidence. I'm working under the assumption that the property tax is effectively incident on the renter, and that renters are on average lower income than owners. [STA-CITE]>Society has decided that current occupants do have a special right to continue living where they do. [END-CITE]Yes. I think society should change their mind. [STA-CITE]>Rent-controlled apartments exist in many cities to try and ensure that current occupants aren't kicked out of their homes. Even squatters have some rights - simply by living somewhere, without having any explicit legal relationship with their location, they gain some (though minimal) rights. [END-CITE]The justification to me for eviction proceedings is that the landlord is asking to use the violent force of the state to kick someone out. This is why squatters need to be gone through a court too. I am not a fan of rent control and think it's similarly market distorting, if not worse, than these policies. So the rent control angle isn't persuasive. [STA-CITE]>I think this is the more desirable world, where occupants have some rights and can expect to be able to continue living where they do. Buying a home is an enormous financial commitment, and you might be committing yourself to 30 years of mortgage payments. Homes are often so valuable that an individual can't expect to buy a home without a very long term commitment to making payments. So, since people are being forced to make these long term commitments to own a home, individuals would be forced to absorb the risk of how the area might change over those 30 years. But nobody can predict what will happen in those 30 years [END-CITE]At least in the United States, residential mortgages generally do not carry a prepayment penalty. In Canada, there are generally prepayment penalties, but not if you sell, and most mortgages are for shorter periods - the prototypical mortgage being a 5 year mortgage amortized over 25 years. So I don't really see how this will lead to destitute individuals. If your property taxes rise faster than expected, sell your house for a large profit, paying no penalties and typically no income tax, and take your large profit with you to buy a cheaper house somewhere you can afford. The only way your property tax becomes unaffordable is if you become the owner of a very valuable asset, in excess of the debt you owe on it. I just don't feel too much sympathy to people who walk away from the deal with hundreds of thousands of dollars in their pocket. [STA-CITE]>Thirdly, there is the moral case that people will be kicked out of their homes through no fault of their own. The value of their home has no significance to long-term occupants who plan to live the rest of their life there, and yet the increasing value of their home is what is going to get them kicked out. There is something sinister about this - these long-term homeowners are kicked out precisely because other people started coveting it. [END-CITE]So this has the most potential to changing my view, but you're not quite there yet. I am sympathetic to that potential buyer as much as I am to the homeowner. A place where fewer units come on the market, and where new buyers pay punitively high property taxes to make up for the very low property taxes of older owners seems unfair. It should matter that other people covet it. Those people are being deprived of something valuable. If you want to make a case against all property taxes maybe you can, but if we're going to tax people's land, I think we should do it neutrally to who they are. [STA-CITE]>So, it seems to me a sensible solution is to have society at large absorb some of this risk. It's very similar to what we've done with healthcare - everyone needs healthcare, and individual health is inherently risky, so we make society at large absorb some of the risk. [END-CITE]I don't see the analogy. This is taxation, not provision.

[KuulGryphun]

[STA-CITE]> The only way your property tax becomes unaffordable is if you become the owner of a very valuable asset, in excess of the debt you owe on it. I just don't feel too much sympathy to people who walk away from the deal with hundreds of thousands of dollars in their pocket. > > I am sympathetic to that potential buyer as much as I am to the homeowner. A place where fewer units come on the market, and where new buyers pay punitively high property taxes to make up for the very low property taxes of older owners seems unfair. [END-CITE]I think it is not fair that market forces are going to price someone out of the home they already own, forcing them to sell. Whether they end up with a bunch of money afterwards should have no bearing on whether it is fair that they were forced to sell. Home buyers should be able to expect their home to remain affordable given that their personal financial situation does not change. If we are assuming that this is basically subsidizing keeping the elderly in their homes (I can agree to that), then I think it should be noted that the elderly aren't necessarily physically capable of a big move. Potential buyers have a choice of where to live, but elderly homeowners do not necessarily have much of a choice. On their fixed income, it may be the case that a huge area around their current home has prohibitively high home values, and the artificially reduced property tax is the only way their fixed income could afford a home. Keeping the elderly near their relatives, as opposed to requiring state care, helps to reduce society's burden of elderly care. The elderly often have more trouble than anyone else adapting to new surroundings, and allowing them to remain in their long-term home is both a comfort to them and a comfort to anyone else who expects to own a home for the long term. [STA-CITE]> I don't see the analogy. This is taxation, not provision. [END-CITE]Everyone needs healthcare (housing). Individual health (housing) is inherently risky. Society should absorb some of this risk to prevent individual destitution and over-saving. I think calling mandatory health insurance in the US anything but a tax is disingenuous. The penalty for not having insurance is even collected by the IRS. Anyway, I don't think my analogy to healthcare is very important for my argument.

[huadpe]

Hm. Ok, I think you've got a fair enough point on senior homeowners finding moving exceptionally difficult. I could see some sort of a narrow carveout there, or an income tax rebate or something for lower income seniors. So I'll give a delta there. ∆

[DeltaBot]

Confirmed: 1 delta awarded to /u/KuulGryphun. ^[[History](/r/changemyview/wiki/user/KuulGryphun)] ^[[Wiki](http://www.reddit.com/r/changemyview/wiki/deltabot)][[Code](https://github.com/alexames/DeltaBot)][/r/DeltaBot]

[Account115]

[Homestead Exemptions](https://en.wikipedia.org/wiki/Homestead_exemption) make the tax more progressive and reduce housing insecurity. In my city, we deal with a lot of substandard housing and older housing. They also provide some defense against gentrification. EDIT: Fixed Link