If she is burdened by property taxes, it's because she's living in an extraordinarily valuable house. Since property taxes are in the neighborhood of 1% of value, and real estate prices in NYC go up by several percent per year, your sainted grandmother could borrow the money to pay the property taxes, against the property, and the increase in property value would more than pay the taxes.
Rich grandmothers are not actually a problem we need to solve.
I'm sorry but this is just wrong on every level imaginable.
> If she is burdened by property taxes, it's because she's living in an extraordinarily valuable house.
Or because she's been on a fixed income for several years. Or because she has a lot of medical bills, as most older folks do. Or because any of a myriad of other reason that would cause someone with a piece of land to not be swimming in a pile of gold coins.
> Since property taxes are in the neighborhood of 1% of value, and real estate prices in NYC go up by several percent per year,
I can't speak to the real estate prices or property taxes so I'll take you at your word here.
> your sainted grandmother
I think we can all go without sarcastic ad hominems against our grandmothers. Jesus Christ.
> could borrow the money to pay the property taxes, against the property, and the increase in property value would more than pay the taxes.
For me, this is just the pièce de résistance of this entire convoluted argument. The idea that someone who is having trouble paying property taxes should get a loan and pay the property taxes plus interest is just laughable.
> Rich grandmothers are not actually a problem we need to solve.
You're assuming that because someone owns property in NYC that they're rich, which is clearly not the case, especially if they've been there for half a century.
> You're assuming that because someone owns property in NYC that they're rich, which is clearly not the case, especially if they've been there for half a century.
You need to read what you wrote again. "Just because someone has a very valuable financial asset, doesn't make them rich." ORLY?
Let me quote from a news story:
"These listings, along with several others at the extreme low end of the market, are well below New York City's median sales price of $635,000, according to StreetEasy.com, which excludes foreclosures from its data. They're also below the bottom 10th of the city market, which has a median sales price of $160,000."
Even if your place is worth less than 95% of NYC properties, it's still worth $160,000.
Your argument is that someone who has a giant diamond but little liquid income shouldn't have to pay taxes on the diamond.
People who are having trouble paying property taxes are RICH people. Their problems go away immediately if they sell the giant asset they are holding onto, or if they even take a loan against its value (and payable when the asset is sold, perhaps when Grandma dies).
Does your argument work for all taxes? Should I just convert all my money into a single diamond and then claim I don't have any liquid cash to pay my income taxes?
"Oh, my diamond is too big to carve up to pay the taxman! Whatever shall I do!?!?"
Not intending to be harsh, but your grandmother could use the equity established in her property, and move to somewhere where the costs of living are within her means.
In cases where the property has appreciated so much that the increase in property taxes is a burden, surely there is a corresponding increase in equity to lessen the blow.
The "CA Prop 13" option pretty much makes newcomers finance existing landowners' property taxes - not my favorite option.
Prop. 13 is a disaster in another way. Because commercial buildings are higher-valued, it is now common for them never to be sold. They are just spun out as a separate entity, and that entity changes hands.
Since they are never sold, their property tax base never increases (re-assessment happens most often after a sale). So there has also been a net transfer of property tax burden from commercial to residential property.
More and more people are doing it too, I think. I was looking at property records, and a surprisingly large number of them were owned by various "trust"s .
> but your grandmother could use the equity established in her property, and move to somewhere where the costs of living are within her means.
Isn't keeping people in the city the whole reason you want to raise property taxes in the first place? Reduce the incentive of people to hold empty condos, so people can live in the city. So asking her to leave is the opposite goal to raising the real estate taxes.
That is why we have prop 13 in California, but that ends up either stripping tax revenue, or heavily taxing new migrants to be state (tech entrepreneurs, international people, etc) -- or, in California, both.
