Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there’s still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.
The owner of an apartment is always receiving income from it, either in the form of the rent check or whatever utility it provides for him to keep it to himself.
I don’t like land taxes and other property taxes because I don’t think there’s a good way to apply those taxes progressively. Rather, if we just take the imputed rent of a given asset (land, building, car, etc.) and add that to the taxpayer’s income, the the progressive income tax can just do its thing.
Land value taxation is inherently progressive. That’s probably why it’s never been implemented.
Is it really? Isn’t a land value tax suppose to be flatly applied to the value of land and not change with respect to the adjusted gross income of the land owner?
You don’t need to adjust for income. How do you get high value land with a low income? How do you own high value land and not derive an income from it? You’re imagining an extreme edge case of some family that’s been passing high value land down, generation after generation, without ever leveraging this advantage into financial success.
The more valuable the property, the larger a component of that value that tends to be in the value of the location itself, as opposed to the capital improvements to that location. Low income housing, as cheaply built as it is, is built in an even cheaper location. Conversely, a house but for higher income people is built more expensively, but even greater is the access to good schools, jobs, shopping, low (blue collar) crime rates, and so on that a high value location provides.
And that’s just residential real estate, which is almost people even think about. With commercial and industrial sites, location becomes even more important.
People who talk this way don’t know what land value is. They imagine there is a relationship to quantity, when location is almost the entire driver. Maybe a thousand square feet of space in upper Manhattan or San Jose or something is comparable to a hundred acres in rural Wyoming, or wherever.
And what about the poor in cities? They already pay a land value tax… to the owners of the land. You will say that if the owners are taxed, they will raise rents… but if they can just raise rents like that, why haven’t they already? Normally, a tax can be “passed on” because a tax on a thing affects the supply of that thing: the tax raises costs, which lowers profits, which drives capital out of that industry and into another, which reduces the amount being produced, which allows the higher price.
But land is fixed in supply. If you’re imagining a way of increasing or reducing the supply, you’re not thinking about land, but capital improvement to it. The supply can be neither increased nor decreased. Its existence is not dependent on any industry or thrift or other service on the part of the landowner and, as such, any income derived simply from owning a location and leasing it out to others is unearned. It’s essentially extortion, one person renting to another the “privilege” of existing, and if there are any landowners not collecting the full value that can be collected, it is either because they haven’t found the highest price yet, or out of the kindness of their hearts.
I’m not sure what you’re getting at. My property tax bill has separate components for the land and the improvements upon it. I’m sure that a larger portion of my income goes to paying it than some of my neighbors.
No, he’s receiving value from it. That’s not the same thing as income. You can’t tax a percentage of value, only actual money.
You’re guessing how much rent he could be collecting and taxing a percentage of the imaginary rent payments… You’re really bending over backwards here to implement a property tax or vacancy tax but with a bunch of extra steps.
Wrong. Basically everyone who’s ever paid property taxes has been taxed on value. Even though I haven’t sold it or nor plan to anytime soon, I owe increased taxes because the estimated value of it has gone up.
Basically everyone who’s ever paid property taxes has been taxed on value.
Right, but you pay property taxes based on the assessed value of the property, you don’t also pay income taxes on property unless that property is actually generating an income.
For example, you don’t have to figure how much you could hypothetically rent your home for if you weren’t living in it and add that to your income, even if you are wealthy enough to have a second home or summer home or something. It really just sounds like NY should significantly raise the property tax rate for unoccupied residential properties other than a primary residence, especially unoccpied residential properties owned by a commercial entity.
Agreed, I’d drastically increase the vacant property taxes such that they might approximate income taxes for a leased property. Seems simpler for the same effect.
Don’t bother. This post is quickly becoming a circlejerk; they’re not interested in learning, just bitching and stroking each other off.
That’s not true. If I receive artwork, a car, shares of stock, room and board, free tuition, etc., then that is income on I which I will owe taxes. Figuring out the value of these things isn’t a guess. It’s an estimate based on actual market data. It’s actually kind of easy in the case of a rental property since the landlord will have advertised the rent amount. So, if he wants to pay lower tax then he can just lower his ask.
Btw Switzerland had this low though they are planning to get rid of it soon
