[anamax]

> if the bank owns the land as in a mortgage

In the US at least, mortgages are on both the land and the buildings.

Getting easy details like this wrong suggest that you don't actually understand how property works.

I get that you have a theory with properties that you and some equations, but that doesn't imply that your equations accurately reflect reality.

As the saying goes, reality has a surprising amount of detail.

[brightly-salty]

I do understand that mortgages are on both the land and the buildings. We were talking about land only though. It is irrelevant to the question of who pays the land value tax that the mortgage also includes the buildings.

[anamax]

"Who pays" was relevant when the claim was that banks holding mortgages would pay.

Let's review: "if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages."

You don't understand mortgages in a way that is essential to your argument. Banks holding mortgages don't own the property. At most, they own the right to grab the property if they're not paid, which is a very different thing.

[brightly-salty]

I will admit that I misunderstand TimPC’s point about people having to pay the land value tax in addition to the mortgage; I misunderstood mortgages in terms of who really owns the land.

But the point still stands. If the land value tax is paid by the homeowner, the sales price of the land is zero (under a 100% LVT), so the mortgage rates are lowered by an equivalent amount. So there is no additional burden upon the homeowner. If we flip the model and say the bank owns the land, they will pay the land value tax until it is paid off. In this case also, the sales price also drops to zero so the mortgage just incorporates the land value tax and the building payment. In all possible arrangements, there is no additional burden on the homeowner until the mortgage is paid off.

[TimPC]

Existing contracts don't magically change just because the government changes how the system of taxation works. I'm not saying it's impossible to have a fair system of mortgages with LVT. I'm saying there are a lot of existing mortgages with specific terms already outlined and no legal basis for changing them. Those mortgages will suddenly be far larger than the new value of the property underlying them. Chances are the homeowners will mostly vacate the property instead of paying those mortgages off and the mortgage holder will then sell the property for a small fraction of the mortgage.

In this system, the homeowner loses any value they had accumulated in their house and the mortgage holder loses a large portion of the mortgage. This is what I'm saying the problem is.

[anamax]

> If the land value tax is paid by the homeowner, the sales price of the land is zero (under a 100% LVT)

I let that bit of bogosity slip by me.

The sales price of valuable land will never be 0.

Govt may not see the price, but it will be paid.

You've convinced me that Georgists don't have any experience with actual people or economies. They just have a theory unmoored to reality.

[brightly-salty]

How much would you pay for land that has 100% of its rental value taxed away every year?

[anamax]

Word games aside, I'd pay for land if I'd make money by doing so.

Suppose that I own a building. I may, or may not, pay for the land it sits on.

In the "land value is taxed 100%" regime, it doesn't make sense for land owners to charge rent because govt takes the "land rent".

%100% of 0 is 0.

I'm pretty sure that they'll figure out some way to get compensated. If they can't, no one will bother to own land.