Counterpoint: higher property taxes force property valuations to be based closer to the “current use” value (ex, what is the value of this house based on its use as a place where someone lives), lower property taxes allow property valuations to be based on the “speculative” price (how much will this land be worth in 40 years, regardless of how I use it now). In general, jurisdictions with low property taxes have a combination of high property values and more rundown buildings/land banking/speculative investment (where speculative investment means owning an empty lot or vacant lot in a highly productive urban area for 40 years) as the carrying costs are lower (houses are valued more on the “what will this be worth in 40 years” and less on “what is it worth for me to use this house as a house right now”)
I find it weird that the two are directly tied together. In my hometown, property taxes are proportional the overall market and the cities budget. E.g. during 2020 my house valuation increased 1.5x, but the property taxes barely changed (because everyones house valuation did the same thing, but the city budget didn't change).
It's a double whammy when you also consider that property taxes are generally based on real estate value. City and local governments are dependent on that income and have little incentive to see real estate values (and thus tax) go down.
That's not really true. Property taxes are usually assessed based on the value of the property and that rises with the housing market. People are sometimes priced out of areas even when they own their home.
I disagree; property taxes make sense for certain specific things that are tied directly to the property itself.
For example, if you want police, fire department, schools, sewage and water supply, etc., it makes sense to tie that taxation to your house directly since those are features and benefits of where you choose to live.
What's happening in Texas with valuations seems absolutely mind-bogglingly stupid though. When you have neighbors with identical lots and similar single family homes valued 200k+ difference in property valuation, there's a problem.
As I said in another comment, this is why there are property taxes. I don't think it's any different than income taxes. You own real estate, the society around you is a multiplier, so you owe a percentage. You make a salary, the society around you is a multiplier, so you owe a percentage.
In practice the percentage could be off, but the basic way the system works makes sense to me and I don't get the people who are sure that it's terribly wrong (whether because they are against taxes or against owning property).
I'm not really advocating one way or the other, just pointing out that property taxes are usually constructed such that the owner pays a flat rate based on an assessed value. There is no tiered increases in rates as the value goes up, so it's pretty much a classic example of a regressive tax.
This is an excellent point I think people often forget about. How does property tax in a house (whose valuation you often have no control over) compare to rent?
How do you then value the land? Property taxes in many areas of the US are notorious for being arbitrarily determined based on the amount the tax jurisdiction needs rather than the true value of the property. In my area it's not uncommon for two houses in the same area of similar builds to be valued differently for tax purposes. Our property valuation went up $53,000 last year while comparable houses in the area were around $15,000 down.
I live in NYC and the city does indeed charge higher property tax on more valuable properties, so I'm not exactly sure what point you think you're making here? Charging property tax proportional to the value of the property is common across basically the entire world (as far as I'm aware).
Property taxes are a rounding error compared to the value of even a small warehouse full of modestly priced consumer goods, talking far less than 1%, especially in industrial areas.
It might be a factor in very low priced bulk goods like gravel or something, but I would be shocked even then.
The part that doesn't make sense to me is that if your property value 20x's, your value from tax does not go up by 20x, so why is property tax linked to the market value of the property anyway?
In large portions of the united states people who own homes have their property taxes go up most every year based on the value of their home. Seems a bit strange to me to treat, in this respect, peoples homes differently.
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