Ever-increasing home values are a Ponzi scheme

Re:Ever-increasing home values are a Ponzi scheme by andrepd on Monday June 21, 2021 @08:29PM (#27586449)

Indeed, the idea of LVT/Georgism is to charge, if not 100%, then close to that amount of the rent commanded by the (unimproved) land. The very idea of the whole thing is that, in order to claim a piece of land for your own usufruct, you need to compensate the public for taking that piece of the commons for yourself and walling it off and preventing the rest of the community from using it, i.e., you owe the community a market rent for that piece of land.

We can fiddle around the edges, e.g. the tax being 50% of market rent rather than 100%. But the principle remains the same.

Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate.

EDIT: So taking that example, let's say your house rents for 1000$ (I've no idea if this is reasonable or not). Land according to your appraisal is 60% of the property value, so land rent, that is, what you owe as LVT, is 600$/mo or 7200$/yr.

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Re:Ever-increasing home values are a Ponzi scheme by BirdieNZ on Monday June 21, 2021 @09:05PM (#27586761)

> Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate.

This isn't usually part of LVT proposals, and for good reason. LVT should apply to all land everywhere, or else it becomes much less effective.

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Re:Ever-increasing home values are a Ponzi scheme by photojosh on Monday June 21, 2021 @09:11PM (#27586812)

And the way to keep this reasonably neutral (ie not dump a massive tax out of nowhere on people), is that LVT replaces at least a portion of say, income tax. That makes it politically viable as well.

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Re:Ever-increasing home values are a Ponzi scheme by bcrosby95 on Tuesday June 22, 2021 @01:17AM (#27588224)

I would imagine this would have a weird effect on land values if enacted. People couldn't afford such a large tax, so prices would generally go down. Since the value of the structure won't go down (because that's based upon cost to build) loss of value would 100% go to the land, which would lower the LVT. But the price to rent wouldn't necessarily go down, since the total ownership cost wouldn't go down.

It obviously would hit an equilibrium at some point but I'm not sure where.

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Re:Ever-increasing home values are a Ponzi scheme by novok on Tuesday June 22, 2021 @02:53AM (#27588750)

A secondary point of something like an LVT is to encourage density, since you get %0 taxation on the building itself, so it can afford to be more expensive. What uses less land, less energy and requires less miles of pipe, wiring and roads to service? A high rise with mass transit train service. A 50 story building on the same size of land next door to a 5 story building will have an approx 10x overall lower tax rate per sqft.

Land developers and people would naturally become economically incentivized to live in apartments as a result, unless they live somewhere somewhat rural already.

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