Comment by europoorean
11 hours ago
The issue with that is the disincentive to sell (or buy), which leads a lot of people to stay put in their oversized home during retirement, for example.
In the UK, 'stamp duty' is something that buyers pay (as opposed to sellers), but sellers also have to buy, so everyone pays to move and everyone stays put to avoid paying.
(And of course no one builds, which is the biggest issue).
I'd say it's OK to defer your property taxes until you sell (or die), but it shouldn't be the default, only something you apply for if you're in a vulnerable position.
I think it's a great idea to let land taxes create the incentives to build efficiently.
In Austria it is even worse. The stamp duty is only for literally buying the house in your name. Thus all sufficiently expensive real estate is wrapped in shell companies where the transfer is untaxed.
The result - stamp duty is exclusively paid by middle class people actually buying homes, never by the rentier class. They already used the money up front to buy the votes for this law apparently
Except they don't, taxing single house owner is just cost of living increase any time area gets gentrified or more desirable
It's basically excuse to get rid of poor that made a mistake of buying a house in area that turned more expensive 2 decades after.
Tax anything after first house, sure, but taxing house by value is terrible idea that never actually worked in a way proponents are saying it would
You don't need to tax the house value, only the land.
You don't get rid of the 'poor'/less wealthy if you allow building higher and thus have a more efficient use of land as land values increase. All owners would share the cost of their land value tax.
The problem is not building higher in areas with very high demand. Of course they become 'rich only neighbourhoods' or whatever.
If a house is worth £1M, a flat in a 5-story building should be less than 200k in the same location. We can't have houses in city centres! We can't have houses 5 min from the city centre! We could definitely have houses 1h from the city centre in a small town. In London or NY we shouldn't, though!
I always tell my internet friends that they should think hard about second order effects. Stamo duty has very negative second order effects. Land value tax has very positive second order effects. Property taxes sit somewhere in the middle.
the incentive is if they sell they realize their gains and are left much richer