Quote:
Originally Posted by TheNewT50
2% per year is far too low. You end up creating a group of people who hold onto their houses for decades because their tax bills would be astronomical otherwise. It impedes liquidity and ultimately makes everyone worse off with more expensive houses than they ought to be. Assuming houses increase more than 2% per year in value, you end up with people whose tax bills are actually diverging from the value of their real estate; this distorts the market hugely. The real beneficiaries of such a law are typically the rich; the poor renters get their benefits gobbled up quickly.
In Atlanta there's a miniature version of this dispute going on right now. Assessments had lagged behind actual values for years, and then they suddenly went up massively. Something like a fifth of homeowners had their assessment increase 50%. Mine doubled; some reported increasing as much as 400%.
Tax assessments should be limited to increase at some amount, but not below the rate of normal house price inflation.
This is fair, I agree they should not be held below expected inflation rates. I was thinking only about the act of capping the increase, not the actual rate it is capped at.
Also, I think the max should compound each year regardless of whether the price increases or not, i.e. if I buy a house in year 0 at $100, and the cap is 3% per year, then even if the house remains at $100 for the next 3 years the cap should go up each year i.e. I would support
Year 0: Value $100, Cap $100, Actual assessment $100
Year 1: Value $103, Cap $103, Actual assessment $103
Year 2: Value $106, Cap $106.09, Actual assessment $106 and also
Year 0: Value $100, Cap $100, Actual assessment $100
Year 1: Value $100, Cap $103, Actual assessment $100
Year 2: Value $106, Cap $106.09, Actual assessment $106