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Comment by pstuart | Hacker News Reader

I was under the impression that LVT was not without concerns, but when I looked it up again to find such issues I didn't seen anything that was all that worrying.

So yes, this would be a perfect application of a LVT.

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Well… except that a land value tax would only make home affordability far worse than it already is.

It would make it better, because a property tax punishes improving your property and a land value tax doesn't, so it would make it easier to build apartments where the land value is high and reduce competition for houses where it isn't.

Haven't read the whole LVT thing too deeply but wouldn't it make single households a time bomb? Say I buy a house on the suburbs of a city, 20 years later the city has grown to the point that I'm no longer part of the suburb but inside the city, which means that my taxes would skyrocket because I have an "underdevelop" lot, even though, as a single individual, I don't have the capital to build a higher density complex to cope with the higher taxes

But that already happens with property taxes - just look at all the people in California who can only afford to live where they do because their property taxes are fixed at their original rate, and so they cannot afford to move anywhere else within the same area.

The best approach there isn't to lower taxes (although a deduction for a primary household is fine of course) but to allow them to defer payment until it's sold/they die. Since in this situation their house is also worth several million dollars.

Which then significantly exacerbates the potential for a negative equity trap, because moving now requires paying all of those deferred taxes. So the longer you've lived somewhere the more you need to down-value when you move...

I think that's the point. If you live in a high cost of living area you would sell your house and it would be replaced with multi unit housing that would bring down the local cost of living

Yes but that means your home is now worth a fortune and you can sell it for a windfall.

You’re making the assumption that the current property tax would end and be replaced. Unless this was all done at the county level, that most likely wouldn’t happen. Even then, many jurisdictions would just double tax. They’d argue that one tax was for land and the other for the dwelling. For the poor who lived in an area that was once cheap, they’d simply lose their homes if they haven’t already as they’d be unable to pay these taxes.

I don't think anyone has ever wanted both a land and building value tax.

Well, there are wealth tax proponents but I don't believe in those - land taxes are the only good kind of them.

True. We should do the opposite and eliminate property taxes on primary residences.

Bye, schools

Sure, why not. American public schools are terrible self-protecting bureaucratic monstrosities. I would be fine with scrapping their funding and reworking the whole system.

Stop relying on local property taxes to fund the schools. That’s a US thing that isn’t replicated in most other well-off countries.

The closest thing Germany has to US-style annually-billed property tax is Grundsteuer, and for homeowners, it’s low triple digits at most. It pays for neighborhood streets, sidewalks, storm drains, and (I think) the fire department. We do pay a pretty hefty transfer tax when we buy property - I think it was about 5% of the purchase price, but that’s a one-time thing.

Schools are funded out of general revenues, mostly personal and corporate income taxes, assessed nationally. Each state has its own school system, with differing structures and standards.

What’s more, funding schools from local property taxes keeps the good schools in the rich communities and the bad schools in the poor communities. It prevents equality of opportunity. It is cynical, mean-spirited, and appalling.

This is true, having split kids between two districts I've seen this first hand.

Funding from state would equalize it, and the rich communities can do their gilding via the PTA. I'd much rather have that then them pulled out of public education entirely.

Hefty is relative.... In British Columbia (Canada) transfer tax is 10%.

I live in Australia. Here, there are no school districts, and local government has nothing to do with public schools - they are all state-run and funded out of the state government budget. The state government does rely in part on property taxes, but also has other revenue sources, so abolishing property tax wouldn’t have any direct impact on education funding here. I don’t see any inherent reason why a US state couldn’t adopt the same public education model.

I’m 100% in favor of recouping the money via other taxes. My motivation for being against property tax on primary residences is my belief that if you own a single family home free and clear, no one should be able to take it away from you simply because you don’t have any money.

If you don't have any money, how will you pay for local government services like police, fire, roads, etc?

If you have a house but no money, I don’t think the government should take and sell your house to pay for those services. And if they did, you’d probably cause the government to incur more costs providing for you as a homeless person than it would have earned from your property tax.

No it wouldn't. Homes generally pay less tax. The biggest tax increases by far fall on parking lots. LVT improves home affordability.

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