I actually want tax valuation to work like an offer - the tax man can choose to purchase your home for the valuation you use for taxation (you don't pay the tax in that case), or accept the tax payment.
if you value your house too high, you'd pay more tax than you'd need of course, but guarantee that it isn't going to be immediately bought up by the tax man. If you value it too low, you're risking a sale. So the ideal is to value it at market price - where the tax man will have no incentive to actually buy it out.
In practice, wouldn’t this be regressive (tax poor more and rich less)?
Imagine a homeowner who uses public transportation, sends their children to public schools, and and supplements their income with public assistance.
They need to create a price for their home. They live in an area with good public transit and good public schools. These public services figure heavily into the price of the house, pushing it up for tax purposes.
Imagine the same house being owned by someone who sends their kids to private schools and drives everywhere. The quality of public schools and transportation doesn’t affect the value of the house.
In practice, people who are poor are less mobile than people who are wealthy. This tax system favors people who are mobile (and don’t consume public services).
How important is it that you stay at your current residence? The more you make, the easier the move (moving costs money too).
Also, because public assistance doesn’t change with the value of the home, the larger the tax payment, the greater the fraction of the tax bill it is.
This sounds nice, but is ultimately a tax on people who aren’t mobile.
> I actually want tax valuation to work like an offer - the tax man can choose to purchase your home for the valuation you use for taxation (you don't pay the tax in that case), or accept the tax payment.
>
> if you value your house too high, you'd pay more tax than you'd need of course, but guarantee that it isn't going to be immediately bought up by the tax man. If you value it too low, you're risking a sale. So the ideal is to value it at market price - where the tax man will have no incentive to actually buy it out.
I use to think this too, but it looks too easily gamed, and over many iterations the taxman would be left selling a bunch of properties lower than the price they paid for it.
In effect, this would be passed off onto the taxpayers, so the net effect is going to be that the taxpayers are paying for the profits of private speculators
who purchase from the taxman and sell or rent the property
for a profit.
This comes up a lot when people argue in favor reforming how real estate is taxed.
When real estate isn’t for sale, it’s “value” is synthetic.
I wouldn’t actually sell my house for less than 400% what similar homes are worth.
For some people that means the value is 400% that of similar homes.
Thankfully the real estate tax folks don’t see it that way.