In December, the B.C. Court of Appeal ruled that a law passed by the provincial government to stave off opposition to the project was unconstitutional.
Removing income taxes in favor of land taxes is one of the most progressive possible taxation policies. People with more wealth own more land, and therefore get taxed more. Less land owned, less tax.
That’s a frankly terrible idea, especially for lower income people.
Income taxes are bracketed based on income, with significant amount of deductions and exceptions for things like disability, having a family, retirement savings, education, etc.
Taxing land, especially rental property, means that the tax landlords pay is just passed down to the renter which makes it more difficult for the individual to then assess how much tax they have actually paid and are responsible for. If we then say the individual is not responsible for paying any of that property tax, then the government will be obligated to refund those tax payments to the individual, which means the government is losing that revenue. If the tax is not refunded, then the individual is going to be responsible for a much higher tax burden than the current system.
None of this actually creates new housing, it just creates a new opportunity for the wealthy to play their money shell game.
Viable solutions include:
Build housing for low-income people
Create new tax schemes to tax VACANT property
Build housing for low-income people
Create legislation to ensure proper classification of housing vs hotels to eliminate the use of empty housing for AirBNB type rentals - Note, this should be in combination with the above, if a person wants to rent out a home/apartment they live in for a weekend while they’re not home, that should still be allowed.
Build housing for low-income people
Implement/Strengthen rent control legislation so that people are not priced out of their home due to greed-driven rent increases
Build housing for low-income people
Create legislation to reduce or eliminate the impact of NIMBY-ism (which is why this particular building in question has not yet been built)
Build housing for low-income people
Create legislation to allow eminent-domain type buyback of unused/vacant property from corporations if they have not shown any progress in developing that land for their business (i.e. if they have pulled permits, submitted plans, or are otherwise showing consistent steps toward using the property, then it’s fine. If they just bought it to sit on, then ownership transfers to the municipality and the company is reimbursed at the standard rate based on acreage)
Build housing for low-income people
Improve public transit and reduce the number of personal vehicles, subsequently reducing the amount of surface parking required in urban areas. Use this land for parks and recreation space (reduces demand for single-family homes in urban areas)
Yea, you haven’t actually read up on LVT. You should probably go do that before arguing against it.
I suggest reading up on why LVT can’t be effectively passed to renters, it’s a very important concept in why they’re so good.
LVT are even more progressive than the income tax brackets, as a) poor people don’t tend to own much if any land, especially valuable land and b) it prevents tax evasion by wealthy people because you cannot hide land, or even work around it by paying yourself $1 or something other financial shell-game bullshit.
The only way to avoid LVT is to not own land, which means that land is then available for other people to own. You want a mansion in a prime part of a city? You’ll pay through the teeth for it. You’re fine with a condo downtown, the taxes will be quite cheap.
This whole “housing shortage” thing is fake, or misleading at best. There are more bedrooms in Canada than people. The problem isn’t a lack of housing, it’s that the current distribution of housing is simply broken. There are far too many detached houses with 4+ bedrooms and 2 retired people living in it because the kids moved out a decade(s) ago. They were supposed to downsize, but they never did, and it’s fucked up the housing market for the next generation. Land value taxes replacing income taxes effectively penalize them for not downsizing when they no longer work and don’t need the space.
There are far too many detached houses with 4+ bedrooms and 2 retired people living in it because the kids moved out
Yeah, they’re not the enemy here, and more often than not can’t afford to move either. When your retirement plan relies on having a paid-off house to either offset living costs or to have as an asset to sell when it’s time to move into assisted living.
Forcing LVT on them means they will need to sell early (and likely quickly) to buy into a condo, which is now going to be FAR more valuable since they will have increased demand (similar to what happened during the pandemic when people were buying houses left and right for the space to quarantine/WFH, houses on my street that sold for $200k a few years before were going for a million+). Subsequently, the property they are selling will be far less valuable due to the tax. So now a retiree is being forced to undersell and overbuy just to avoid a hefty tax bill, pay lawyers, realtors, movers, likely have to sell a lifetime’s accumulation of stuff (or abandon it) among all the other costs associated with selling a house and moving. Chances are, they will end up having to pay a mortgage or begin renting possibly decades earlier than when they planned to, eating up their retirement savings.
What do we do with those people? If we left them alone, they would eventually give up the house either when they die, or move into assisted living. It’s a very short-lived problem in the long-term, and not nearly as impactful as apartment buildings with 50% occupancy because the landlords want $3k a month or people who own multiple homes as rental properties.
it prevents tax evasion by wealthy people because you cannot hide land, or even work around it by paying yourself $1 or something other financial shell-game bullshit.
How will the value of the land be assessed? Property value is assessed as an estimation of the fair market value if it were to be sold today. Unless it’s an empty lot, the fair market value is a homogeneous combination of the land and building(s). To get the value of the property, you would have to subtract the value of the building from that total. This is an estimate that insurers and lenders make all the time and there is little to no real accountability as to how these estimates are made. Say I have a property with a house and the whose thing is assessed at $500k. I take out insurance and they estimate that the replacement value of the house is $600k because that’s what they think it would cost to build a similar house there. Does that mean the land it sits on is valued at -$100k?
Maybe instead we try to use recent empty-lot sales to assess land value based on dollars per acre. The only empty lot near me has been vacant for years because nobody has been able to get through the permitting process to build on it and has been sitting with a for-sale sign on it for as long as I can remember. Since nobody wants to buy it, does that make it worthless? If that lot is worthless and it’s close to the lot I live on, does that make my land worthless? If I use that to prove that my land has no value, does that mean I pay no tax?
All that still doesn’t solve housing for low-income people, though. If I had a plot of empty land big enough to build an apartment/condo building, it would be advantageous for me to build something that I could rent out for as much money as possible, and luxury units are more profitable. If I have a building with empty units, they occupy the same land as the units with tenants, who are covering the tax bill for the land the building sits on. I can then improve the empty units and rent them at a higher rate, because why would I hamstring my profits? LVT encourages me as a landowner to maximize the amount of profit I can extract from that parcel.
I am also not convinced that LVT can be used as a complete taxation system and additionally, I am not convinced that it will address the true shortage of tax revenue, which is that of the extremely wealthy and massive corporations, who extract an amount of wealth far disproportionate to the amount of land they use.
What’s your solution? If you have none, STFU and let the grown-ups do their work.
Land value taxes high enough to completely remove all income taxes.
Ah. I smell conservative scambait.
Well maybe you should read a little deeper then.
Removing income taxes in favor of land taxes is one of the most progressive possible taxation policies. People with more wealth own more land, and therefore get taxed more. Less land owned, less tax.
That’s a frankly terrible idea, especially for lower income people.
Income taxes are bracketed based on income, with significant amount of deductions and exceptions for things like disability, having a family, retirement savings, education, etc.
Taxing land, especially rental property, means that the tax landlords pay is just passed down to the renter which makes it more difficult for the individual to then assess how much tax they have actually paid and are responsible for. If we then say the individual is not responsible for paying any of that property tax, then the government will be obligated to refund those tax payments to the individual, which means the government is losing that revenue. If the tax is not refunded, then the individual is going to be responsible for a much higher tax burden than the current system.
None of this actually creates new housing, it just creates a new opportunity for the wealthy to play their money shell game.
Viable solutions include:
Not sure if I mentioned:
Yea, you haven’t actually read up on LVT. You should probably go do that before arguing against it.
I suggest reading up on why LVT can’t be effectively passed to renters, it’s a very important concept in why they’re so good.
LVT are even more progressive than the income tax brackets, as a) poor people don’t tend to own much if any land, especially valuable land and b) it prevents tax evasion by wealthy people because you cannot hide land, or even work around it by paying yourself $1 or something other financial shell-game bullshit.
The only way to avoid LVT is to not own land, which means that land is then available for other people to own. You want a mansion in a prime part of a city? You’ll pay through the teeth for it. You’re fine with a condo downtown, the taxes will be quite cheap.
This whole “housing shortage” thing is fake, or misleading at best. There are more bedrooms in Canada than people. The problem isn’t a lack of housing, it’s that the current distribution of housing is simply broken. There are far too many detached houses with 4+ bedrooms and 2 retired people living in it because the kids moved out a decade(s) ago. They were supposed to downsize, but they never did, and it’s fucked up the housing market for the next generation. Land value taxes replacing income taxes effectively penalize them for not downsizing when they no longer work and don’t need the space.
Yeah, they’re not the enemy here, and more often than not can’t afford to move either. When your retirement plan relies on having a paid-off house to either offset living costs or to have as an asset to sell when it’s time to move into assisted living.
Forcing LVT on them means they will need to sell early (and likely quickly) to buy into a condo, which is now going to be FAR more valuable since they will have increased demand (similar to what happened during the pandemic when people were buying houses left and right for the space to quarantine/WFH, houses on my street that sold for $200k a few years before were going for a million+). Subsequently, the property they are selling will be far less valuable due to the tax. So now a retiree is being forced to undersell and overbuy just to avoid a hefty tax bill, pay lawyers, realtors, movers, likely have to sell a lifetime’s accumulation of stuff (or abandon it) among all the other costs associated with selling a house and moving. Chances are, they will end up having to pay a mortgage or begin renting possibly decades earlier than when they planned to, eating up their retirement savings.
What do we do with those people? If we left them alone, they would eventually give up the house either when they die, or move into assisted living. It’s a very short-lived problem in the long-term, and not nearly as impactful as apartment buildings with 50% occupancy because the landlords want $3k a month or people who own multiple homes as rental properties.
How will the value of the land be assessed? Property value is assessed as an estimation of the fair market value if it were to be sold today. Unless it’s an empty lot, the fair market value is a homogeneous combination of the land and building(s). To get the value of the property, you would have to subtract the value of the building from that total. This is an estimate that insurers and lenders make all the time and there is little to no real accountability as to how these estimates are made. Say I have a property with a house and the whose thing is assessed at $500k. I take out insurance and they estimate that the replacement value of the house is $600k because that’s what they think it would cost to build a similar house there. Does that mean the land it sits on is valued at -$100k?
Maybe instead we try to use recent empty-lot sales to assess land value based on dollars per acre. The only empty lot near me has been vacant for years because nobody has been able to get through the permitting process to build on it and has been sitting with a for-sale sign on it for as long as I can remember. Since nobody wants to buy it, does that make it worthless? If that lot is worthless and it’s close to the lot I live on, does that make my land worthless? If I use that to prove that my land has no value, does that mean I pay no tax?
All that still doesn’t solve housing for low-income people, though. If I had a plot of empty land big enough to build an apartment/condo building, it would be advantageous for me to build something that I could rent out for as much money as possible, and luxury units are more profitable. If I have a building with empty units, they occupy the same land as the units with tenants, who are covering the tax bill for the land the building sits on. I can then improve the empty units and rent them at a higher rate, because why would I hamstring my profits? LVT encourages me as a landowner to maximize the amount of profit I can extract from that parcel.
I am also not convinced that LVT can be used as a complete taxation system and additionally, I am not convinced that it will address the true shortage of tax revenue, which is that of the extremely wealthy and massive corporations, who extract an amount of wealth far disproportionate to the amount of land they use.