[icedchai]

15 years? you need to be more ambitious.

i paid off my home in less than 7 years (small condo, under 200k) in my early 30's.

i had a friend do the same thing, except his house cost a bit more.

the key is living below your means. you don't buy the biggest house you can afford, because you probably don't need that extra space anyway.

for anyone with a decent job and some discipline, it's possible. finding the job is the easy part...

[3825]

I don't mean to derail the conversation but I wonder how much would it cost to buy a piece of land outright -- with no future obligations in terms of property taxes. Is this a wild goose chase? There will always be public cost of building roads and bridges and schools and firefighters who all have to be built/paid somehow.

It doesn't apply in your case as your property tax is probably much less than your maintenance fee to the property management. I know it is silly to think this way but I can't shake the feeling that I can lose my house that I own if tomorrow I don't have enough income to pay property taxes.

[clarkm]

https://en.wikipedia.org/wiki/Allodial_title

[icedchai]

Yes, I think buying land "outright" is impossible. Perhaps in some unincorporated area or whatever?

Property taxes are relatively high where I live(about $350/month, though I pay quarterly.)

[mikeash]

I imagine you could purchase some sort of financial product that would pay out continuously to cover your taxes. Basically a perpetual annuity, with some wiggle room built in to account for changes in tax rates and property valuation.

I don't know what a realistic rate would be for such a thing, but probably quite low. So you'd probably have to put in something like 50x your annual property tax payment.

[briandear]

While that would be cool, the concept of never owning your land smacks of feudalism. It's almost like we're sharecroppers to the government. Taxes are important, however, those taxes could be collected instead by taxing the consumption of necessary resources rather than just having the piece of ground. For example, fire protection -- it could be argued that the virtue of owning land itself doesn't necessarily require fire protection. So rather than using the land as effective collateral to ensure tax payments, why not simply charge the landowner for fire protection in lieu of taxes? If they refuse to pay, their land isn't seized (as is the case now,) they merely have to assume the fire risk. Of course, getting insurance on the land (or improvements) would necessarily require fire protection, so the tax base would be minimally effected, yet not make a person subject to losing their home and land as a result of taxation.

Water and sewer is already paid for by taxes on those services. Really the big issue is with the schools, however existing income and/or sales taxes could compensate.

The problem with taxed land is that the taxable value determines the taxed amount rather than some other, more objective measure. Valuations on land and improvements are subject to external, market forces and by their nature are unfair. Imagine a family that purchased unused Napa farmland 100 years ago. Their real income has stayed the same (or declined) yet their taxes have increased with no correlation to their income. Even if the land was prime vineyard, unless they're actually making income from it, the effective output of the land didn't change from when they purchased it. So by the mere fact that they chose not to plant grapes and produce wine, they could lose their land due to an inability to pay the taxes. That then puts economic pressures on landowners that would lead them to selling out to large conglomerates.

For example, if you have prime farmland and choose not to capitalize on it, you'd have a big incentive to sell-out to a company like Monsanto, or else lose the land or go bankrupt paying the taxes. Yet if you were taxed on the land's income (and services consumed,) you'd be able to afford the taxes which would be based on output rather than potential output.

This would benefit everyone, except perhaps country property appraisal offices. As it is now, you're taxed based on potential market value and not necessarily real value. Real value can't be determined until someone actually pays money for a property -- anything before the actual purchase is just somewhat educated speculation.

[gohrt]

Feudalism in service of society is a good thing. Permanent land ownership is literally the source of aristocracy and a huge problem where it exists.

http://www.infoplease.com/timelines/voting.html "1790 Only white male adult property-owners have the right to vote."

[mikeash]

Life, ultimately, requires continuous activity to sustain. So I don't get very bent out of shape about the perpetual nature of property taxes, because it's fairly minor compared to e.g. the perpetual nature of food.

You can come up with ways to replace property taxes, without a doubt. There's nothing necessary about any particular tax. The question is just whether it's the best way to do things.

Water and sewer would work fine without it, I agree. A bigger problem, I think, is roads. Highways are mostly funded from gas taxes but local roads are not. It's not practical to directly charge for use of local roads.

You could compensate with other taxes, but now you're taxing (and thus somewhat discouraging) productive activity.

The scenarios you paint don't necessarily seem bad to me. Unfair to the owners, perhaps, but it doesn't seem to benefit everybody else as you say. You correctly infer that property taxes encourage productive use of land and discourage allowing it to sit fallow, but isn't that a good thing? If we make the strong but at least partially true assumption that money is a proxy for value, land that produces enough money to pay for its taxes is producing more value than land that does not. Someone sitting on prime farmland and not actually farming it is a net negative to society unless they're getting more value out of that land than a farmer would.

I don't mean to go all Ayn Rand here and start acting like nature, parks, and anything that's not economically productive is valueless. But still, I think there is value to be had in encouraging land owners to put their property to some actual economic use.

I'd be more upset if property taxes were higher, perhaps. Here, for example, they're about 1%, which is not much. If you can't afford 1%, then you have an enormous amount of money tied up in your property without much money outside of it. It's hard to fit right into a spot where you could afford to maintain your property, but can't afford the taxes. For the vast majority of property owners, the mortgage is by far the major question when it comes to losing one's house or land because they don't have money. Pay off your mortgage and have some savings and you are nearly safe from losing it due to property taxes.

[3825]

>Someone sitting on prime farmland and not actually farming it is a net negative to society unless they're getting more value out of that land than a farmer would.

To play the devil's advocate: Why stop at land? What about people who have gold under their mattress? Or perhaps (stick with me here) someone who owns the patents for a machine that he refuses to sell anything himself and forbids anyone else from selling anything remotely similar?

Also, I hear we pay farmers not to produce crops because we are afraid seasonal over-production could destabilize prices?

[Yen]

From another perspective, some of those downsides could be considered behavior as intended.

Basically, in a tax-less scheme, there's a strong financial advantage to just showing up first.

There is an absolutely limited supply of land, and society has an incentive to make sure this limited supply is being used effectively to produce wealth. Society also has an incentive to make sure that everyone is housed, financially stable, and healthy. These are competing concerns.

Say there were no property taxes, so the only incentive for selling land would be a high enough price. Your hypothetical family would be sitting on prime Napa farmland, not producing wine, and society would have that much less wine to drink.

An aspiring young wine-grower might like to purchase this land, and could even trade a bit of land of his own. If the original family doesn't want to move, though, the aspiring wine-grower is out of luck.

A property taxation scheme encourages people to use their land to produce wealth, either by producing it directly, a la farmland, or by housing people and keeping them healthy, such as houses or apartment buildings.

In a tax-less scheme, there's a strong advantage to just showing up first. The lucky few to first colonize Napa can maintain control of the land indefinitely, and younger generations and immigrants are at a financial disadvantage, as they won't have the option of owning their own land, but they'll be in a marketplace competing with persons who don't have to worry about housing at all.

[jdmichal]

> If they refuse to pay, their land isn't seized (as is the case now,) they merely have to assume the fire risk.

The problem being, of course, that fire has a habit of not staying put.

This kind of idea becomes even more ridiculous if you apply it to police service instead. Are they not going to arrest the criminals because the person didn't pay their quarterly police stipend? Do they get arrested after they step off the property, and the stolen goods just auctioned off?

There is a societal benefit to having these services, so therefore society as a whole is requested to pay.

[13rules]

I've long thought the exact same thing. Taxation of property based on the government’s assessed value seems unfair simply at face value. It punishes the financially responsible citizens who pay off their property in the scenarios you mentioned. It seems to me that if you buy a piece of property you should be able to live there as long as you want without paying any taxes on it. Why should you be indebted forever to the government?

[eru]

Econically speaking, taxing land ownership directly is pretty efficient. After all, it's hard to evade this tax since you can't hide land, and the tax won't affect the (fixed!) supply of land either.

[gohrt]

If you have a family and kids, you will need a bigger more expensive place, so tack on those years to the total.

[quadrangle]

You mean, you will prefer a bigger place. It's not a need. We live in the most spoiled country on Earth and think that our absurd norms are the same as necessities. Having a decent safe home in a decent place with modern technologies is the most anyone needs.

[npsimons]

My grandparents on my father's side managed to pay off a mortgage in seven years, twice. And that on a professor's salary and sending two kids to college with no loans. Of course, the argument can be reasonably made that wages haven't really kept up with inflation . . .