Interesting idea for property taxes (mortgage, buy, sell, properties)
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Danish economist Paul Hünermund recently posted an interesting tweet:
"To collect taxes, King Christian IV of Denmark (12 April 1577 – 28 February 1648) asked captains of ships to estimate the value of their cargo, which was applied as the tax base without further audit. But the king also claimed the right to buy the entire cargo at exactly that price."
Perhaps when local property tax assessors say the value of a residential house is $X, the homeowner ought to have the right to "put" the property to the assessor's office at that price.
This could eliminate the entire property tax appraisal appeal process, making county governments that much more efficient. "OK, you say my house is now worth $1,000,000 ??? Fine. Here are the keys, and must give me $1,000,000 cash by the end of the week."
Or, perhaps another interesting way would be for homeowners to self-declare the value of their property for tax purposes - with the twist that anyone can force a purchase of the property at that self-declared price.
That's a pretty bad idea. The homeowner get 2 choices...overestimate the value of his property and pay an unfair amount of taxes, or underestimate and become homeless. And it would be impossible for the town to come up with a budget because they'd have no idea what their revenue would be.
Property appraisals are fairly easy and accurate for ticky-tacky properties that all look the same.
Gets real difficult for properties that are "unique" for various reasons.
Years ago, I wanted to buy a off-grid property in my county. A former Forest Service employee, was selling a database of properties sold in the county.
Guess what?? Properties in the county WITHOUT electrical service were WORTH much, much more that properties that had electrical service.
BUT most of the off-grid properties were located within the boundaries of a area managed by the National Park Service and next to a National Park.
When I went to get a mortgage for my off-grid property, I showed the bank my list of comps.
I did get the mortgage, with a 1% surcharge due to being a second home.
This same approach has been suggested for implementing a wealth tax….require people to estimate the value of all of their assets and pay the requisite tax based on those estimates. I think it is a pretty good idea if you in fact want to tax wealth (or just property as you have suggested here)
That's a pretty bad idea. The homeowner get 2 choices...overestimate the value of his property and pay an unfair amount of taxes, or underestimate and become homeless. And it would be impossible for the town to come up with a budget because they'd have no idea what their revenue would be.
Well, the same thing can more or less happen currently. If your property tax assessment is beyond your means to pay, you would have to sell and, as you say, “become homeless”. In your scenario, the homeowner picks the value, and in mine, the government picks the value. In either case, you could lose your house.
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Originally Posted by WVNomad
Well, the same thing can more or less happen currently. If your property tax assessment is beyond your means to pay, you would have to sell and, as you say, “become homeless”. In your scenario, the homeowner picks the value, and in mine, the government picks the value. In either case, you could lose your house.
My grandparents and my parents and my inlaws all lost their farms and ranches due to false property tax assessments (Highest and best use, BEFORE ag / farm exemptions were implemented)
I'm likely to lose mine before I croak. (My valuation is 10x what it cost me to build and taxes have increased from $800/ yr to over $15,000). Same home, no improvements, just older and worn out.
I proposed this during the 2008 housing crisis... "Just write me a check for the assessment, and it is yours".
I would gladly sell to assessor for what they consider it is worth ~2x market value, which I have advertised it at 1/2 the assessment and no bites. (Tho the assessor really likes it and claims he wants his CA parents to buy it at the tax auction.)
We're toast. I pounded every nail and laid every brick with the intention to STAY in my custom designed and built home. but... the tax assessor has other 'higher valuation' plans. We've been forced to leave (3) very prime locations due to Californication of property values. No other state besides CA has Prop 13, so many states have been ruined and displaced tens of thousands of senior citizens, the very people who made these communities nice and desireable placed to live.
The analogy to shipping cargo doesn't hold. Cargo is intended to be sold fairly soon, whereas a homeowner may not want to sell for decades.
Also home appraisal is way beyond the capabilities of most homeowners. The shippers in the tweet were professionals and businessmen. There would be so many mistakes and hijinx if property appraisal were turned over to homeowners.
That's a great idea.
Suppose I had some obnoxious neighbors, but they weren't breaking laws so nothing could be done.
With this forced sale concept, I could buy their house and force them out. Yes, I might not make a profit, but it's something I could easily do.
Also by having a forced sale law, it would be a handy for a group of people to rid their neighborhood of people who have an unfortunate skin color, or who go to the wrong church.
Danish economist Paul Hünermund recently posted an interesting tweet:
"To collect taxes, King Christian IV of Denmark (12 April 1577 – 28 February 1648) asked captains of ships to estimate the value of their cargo, which was applied as the tax base without further audit. But the king also claimed the right to buy the entire cargo at exactly that price."
Perhaps when local property tax assessors say the value of a residential house is $X, the homeowner ought to have the right to "put" the property to the assessor's office at that price.
This could eliminate the entire property tax appraisal appeal process, making county governments that much more efficient. "OK, you say my house is now worth $1,000,000 ??? Fine. Here are the keys, and must give me $1,000,000 cash by the end of the week."
Or, perhaps another interesting way would be for homeowners to self-declare the value of their property for tax purposes - with the twist that anyone can force a purchase of the property at that self-declared price.
This seems like a bad idea. Around here, assessed values tend to trail market value by several hundred thousand dollars, so the idea of the county/city coming to me and buying me out of my condo for half a million less than I could get on the open market sounds rather frightening.
Applied to a larger scale, what stops a local government from abusing this, intentionally under-assessing for the purpose of scooping a la eminent domain?
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