Re: Venue conditions

On Fri, 18 Aug 2006 07:44:01 -0400, Andy Gefen
<zagefenz@xxxxxxxxxxxxxxx> wrote:

On Fri, 18 Aug 2006 06:22:09 -0400, "volkfolk" <volkfolk@xxxxxxxxxxx>
wrote:


"Andy Gefen" <zagefenz@xxxxxxxxxxxxxxx> wrote in message
news:87s9e258bobitdsnu8taachh80o601g2e3@xxxxxxxxxx
On Thu, 17 Aug 2006 22:06:19 GMT, "DGDevin" <dgdevin@xxxxxxxxxxxxxxx>
wrote:

Why should you be taxed on the *potential* value of your property? After
all, you don't get a dime from that property unless you sell it, being
taxed
on what it might be worth *if* you sell it is like being taxed on the
raise
in salary you *might* get next year.

Can you define what the "potential" value of a piece of property is?
Either the property has that particular value, or it doesn't. A
proper appraisal reflects the value of the property and should reflect
the price at which it would change hands in an arm's-length
transaction. I don't know of a single jurisdiction that taxes the
"potential" value.

If you don't sell it, it is only worth what you paid for it. It isn't a
liquid assett. I have some very nice family heirlooms such as an Oriental
Rug that was in my father's office (Appraised at an obscene amount of money
a couple of years ago-well into five figures), My Grandfatier's Lionel
Trains, and a feel other peices of furniture and Artwork The have a
potential value of close to $100,000-if I sell them. Should the government
be able to tax me on $100,000 in additional property? I have no intention of
selling any of it, Should the government be able to tax me on the value of
items that have always belonged to my family and I have no intention of
selling? Fair market value is how to determine what you could potentially
sell if for. But suppose the "value" of the property decreases. The value is
now "less". IMO these are artificial numbers, which are only relevant when
money and ownership change hands

It's pretty much the same thing. Property is worth what you paid for it when
you bought it, unless you improve it or sell it (IMO)

Scot


If that were the case, then values would never appreciate. I'd be
able to buy a nice house for $10k. Property is worth what the market
would pay for it. If you hire a real estate agent to sell your house,
they're not going to care what you paid for it 30 years ago. Yes, it
is a relatively illiquid asset, but that doesn't mean it doesn't
appreciate over time. And if the value (not the "potential" value)
goes down, you can appeal your property tax assessment and have it
reduced. If your jurisdiction taxed all personal property, then yes,
you'd have to pay taxes on $100,000 of your grandfather's trains, but
they don't do that (I believe they do have a wealth tax in France,
however). I believe your gripe is with people whose property taxes
have risen substantially because they live in gentrifying areas. First
of all, they're sitting on a gold mine. In some areas of DC people
bought their houses for something like $40k many years ago, and
they're worth closer to $700k nowadays. Secondly, a lot of
jurisdictions attempt to mitigate the impact of property tax increases
through several methods: elderly credits, homestead credits, or caps
in the assessment increases. There is nothing inherently unfair in
using current values, since that means that the community is
contributing to the government's needs according to how much they own
(house-wise).

-- Andy (remove z's to respond)

These are all good points, but the main reason why property values
have to be based on current market value goes back to the original
poster who argued that property taxes should be based on the price
paid for the property regardless of any subsequent appreciation. As I
explained in another post, this would be totally inequitable. My
neighbor and I could own identical homes, mine purchased in 1990 for
$100k, his in 2005 for $200k. Since the homes are identical, they're
both worth whatever the current market value is, and we both receive
essentially the same services from the town. But if we were taxed
based on our purchase prices, my neighbore would be paying twice as
much in taxes. Please explain how that could possibly be fair?
Property is NOT worth what you paid for it when you bought it.

JimK
.

Relevant Pages

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