Lol what would you do if just nobody happens to want to rent your unit? You have to pay an increasing tax for the rest of time? You couldn't sell it because who would want to buy it.
So, units in areas of high land value get taxed more and more, incentivising either using the lot for something people want, or selling it to someone who will. Whereas units in areas of low land value get taxed much less, reflecting the higher difficulty in getting good value from it.
I love comments like this. Condescending, confident, completely ignorant of extremely basic concepts relevant to the topic under discussion, like the 300 year existence of property tax assessors in every county in north america
In Australia, property valuation is a regulated profession. We have state-run land registry departments that tell the tax office what value to assume for each piece of land for tax purposes. If you disagree with the valuation, you can pay for your own private one (from a registered valuer).
Local government taxes (“shire rates”) are indirectly based on “Gross Rental Value” (that is, if the rented out the property at market value, how much would you expect to receive per year?).
There is also land tax, which is based on undeveloped property value.
Most commercial leases have the tenant pay the rates & taxes. If you own a property with 10 equally-sized shops, and one of them is empty, then you by law must pay 1/10 of the rates & taxes (and any other outgoings, like repairs). You cannot split the outgoings nine ways. This acts as a vacancy disincentive.
Presumably the local government, they already do this to calculate property tax across North America, and getting only the value of the land is easier than the value of the land plus property on top of it. It really isn't changing much in this regard.
Actually it's an independent agency of the provincial government:
> The Municipal Property Assessment Corporation (MPAC) administers property assessments and appeals of assessment in the province of Ontario, Canada.[2][3][4] MPAC determines the assessed value for all properties across Ontario. This is provided in the form of an Assessment Roll, which is delivered to municipalities throughout the province on the second Tuesday in December. Municipalities then take the assessment roll, and calculate property taxes for each individual property in their jurisdiction. MPAC complains that taxpayers often confuse MPAC's role as an assessment agency for taxes; MPAC responds that it only provides assessments. Municipalities set the tax rates and distribute the tax burden based on the assessed values provided by MPAC.
[…]
> Every municipality in Ontario is a member of MPAC, which is governed by a board of directors composed of taxpayer, municipal, and provincial representatives.[6]
One proposal I like for this is "cost" from the book radical markets - owners have to state a price for their property quarterly, are taxed according to that price, and must accept offers to purchase at that price.
If no one wants to buy you drop the price until they do. Not saying it’s a good policy, but it would drive down real estate speculation and lower rent.
How about making the tax increase each month the unit is unoccupied, but also making it proportional to the asking rent? No one has any use for it, high asking rent => high tax. No one has any use for it, very low asking rent => low tax.
That would require that nobody has any extra use for free/cheap space. It would mean that nobody needs additional storage space, nobody needs space for a studio or an office.
This would essentially only happen if you rented in a mega high crime area, which means landlords would be incentivized to do something about crime.
That does not seem like a realistic problem for very many places. If a jurisdiction contains land with so little value that it won't support the taxes required for upkeep of the jurisdiction, then the jurisdiction could dissolve. Which is what happens to a ghost town I would imagine. That is not likely to happen to New York City.
So over time the vacancy tax is increasing and the sale price is going down. Obviously the vendor needs to sell or redevelop before the price hits zero. If they fail to do so then they lose the property. Speculation sometimes fails. What's the problem?
Why can’t it be both? Could have a logarithmic scale, could have it increase by a fraction of a % of $(value - currentTax) so that it increases more slowly over time.
Not saying I agree with the underlying idea, just confused about why “increases ever month” necessarily means it cannot be “tied to the value of the property” in a `calculateTax(propValue, timeEmpty)` sort of way.
If the value of the property is so low that I you can find no one to rent it at or above your costs, there is always the option to abandon it. At least in the US, you don't have obligations toward property you have abandoned.
Then the unit is in a bad place and shouldn't be there. It should be demolished and turned into a park, surrounding social issues addressed, or maybe combined with an adjacent unit.
If the state owns the property, they lose the opportunity cost of taxes paid by a private owner. So, they're heavily incentivized to return it to private ownership as soon as possible... Or to consolidate several such properties into something that is sellable, or to repurpose the property into something people need, like more housing.
Not a sensible idea.