[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.