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Comment by bugglebeetle | Hacker News Reader

And yet in California, it has practically no effect on prices because people selling have absurdly low property tax rates locked in from buying decades ago, thanks to Prop 13.

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That's the perfect analogy, a huge disincentive to move. I was telling my son today that I would love to move, we need a different house and for a variety of reasons in a different neighborhood. But I cannot bring myself to trade 2% for 7%. Back when it was 5.75% for 6.25% who cares, now it's a big deal. My exact same house now would cost me 2x in payments.

Some people rent out the original house or try to transfer the low mortgage rate in order to monetize it.

Long term non-transferable mortgages are the home ownership equivalent of rent control. In both cases housing ends up being used suboptimally because moving is too expensive.

Oregon too. People buying new construction get kinda screwed.

Oregon property tax rates are insanely high on older units too IMO. How does this apply to new construction?

My understanding is that in Oregon, new construction property taxes are higher than on older units

Old property gets locked in until there’s something to trigger a change. There’s a couple ways to avoid it a good contractor can work around. It’s not the rate that’s lower on the older property it’s the property value. They have a law that limits how much it can increase per year similar to prop 13 but it can transfer to new owners. Makes old houses worth significantly more than some new homes.

Just to add more context here’s the Oregon rules. The linked doc might not be the most up to date but should provide enough info.

https://www.oregon.gov/DOR/forms/FormsPubs/maximum-assessed-...

Honestly I think this one is totally fair. I would even go further and say that property tax you pay on your house should be capped at what you're paying on the day you bought it. And even further we should just get rid of property taxes and collect it via income. We don't tax unrealized gains except for property and doubly because you can't just sell 20% of your house to pay the taxes.

Owning your home is meaningless if you can be priced out of it while just living there. Making people come up with money because they have an asset that can't be readily turned into money is silly when you can just tax money.

If you shouldn’t have to pay more in property tax, then why should you be a me to realize corresponding gains on the sale price, above inflation? After all, that has very little to do with whatever the owner does in HCOL areas, but is instead drive by the total economic activity that occurs around them. Home ownership is also meaningless if more and more people are locked out of it based on the premises of “fuck you I got mine (20 years ago)”.

Those gains are taxed (minus the exemptions, which perhaps are too generous).

Part of that is to prevent the “I can’t move from my house to the identical one across the street because of taxes” issue.

For all practical purposes, the majority of people do not pay taxes on those gains and they’re easily dodged through a variety of mechanisms.

It's not entirely meaningless. You have a place you can modify to your desire as long as it's allowed by the law and you're earning equity instead of paying it to a lord. Quit exaggerating.

California's laws allow for tax to not reset when passing houses down through inheritance, too. Do you feel this is also fair?

Earning equity just means I own it, that not a benefit that's the definition of ownership. Do you not view your government as the acting lord demanding recurring money to continue owning the thing you own?

And yes for inheritance because I don't consider inheritance to be a transfer of property in any meaningful sense. The person who inherits my house didn't buy it, they don't have to get a new mortgage, and they deserve to continue having the property on the same terms I did. I don't think any inheritance should be taxed outside the regular taxes on income. And more broadly people should be able to and actively encouraged to build generational wealth. It's silly that the typical experience is kids starting new families from near nothing.

Nevada offered Allodial title for awhile.

I agree property taxes are inherently problematic and potentially even dangerously unjust - they are one of the few major taxes that continue even after income has ceased.

We (usually) don’t tax food because it’s “necessary” and then tax houses? The “homestead” exemption is usually a farce.

I could be convinced that a 0% property tax on dwelling units, owner occupied (with reasonable limits to prevent Elon Tesla from living in his factory) and instead applied against commercial property would be fine. Could also reduce the expanding “all housing” suburbs.

These seem like wild takes to me, but thanks for sharing your opinions on them, it gave me another perspective to think on a bit.

Of course inheritence is a transfer of property, in the only meaningful sense!

Literally yes because that the framework the law provides to conceptualize it but we build in so many exceptions because folks don't really consider it to be one. We don't have a good way to express familial ownership. All my stuff isn't owned by me, not really, it's owned by a line of succession. My wife isn't being given my stuff if I die it always was hers, she's next in line and so on.

If it's unfair to tax unrealized gains from owning property, then surely it's even more unfair to tax actual work?

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