Danny Handelman 
Member since Aug 10, 2012


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Re: “Why everyone loses under the city’s new property tax plan

The Halifax tax reform seems to be based on what politicians perceive will maximize the probability of being re-elected, not land value taxation (and would still be skewed by zoning and development charges depress property values of low-density land use and inflate higher density land uses). The article seems to compare changes to property taxes of detached housing and ignore the other types of non-apartment/condo dwelling units (semi-detached, rowhouse, townhouse). I assume Upper Hammonds is an outlier amongst suburbs (being primarily urban originally but increasingly labelled as suburban with little or no change to land use). The urban commercial properties, in general, will be subsidizing the suburban commercial properties, as commercial property values tend to be based more on revenue-streams (at least in Ontario) rather than cost to provide services, a reflection of size of the property and extent that it is segregated from residential uses of the land. So, the suburban commercial properties, which tend to have oversize parking lots (underutilized land) should be paying more in property taxes than a commercial property with no parking lot. Capping assessments are stupid, in general: a valuable property reflects high demand to reside there, so the market pressure (in this case, property taxes) to use the land more efficiently should be greater than a low-value property.

Apartment owners will pass on the lower property taxes on apartments if competition increases from new apartments being constructed (which would occur if zoning, development charges and property taxes made it more profitable for builders to build upward rather than outward). In Ontario, there is provincial legislation which requires apartment owners to reduce rent if property taxes decrease by more than 2.5%. Under equitable land value taxation, the assessment system would become simpler (removal of "improvements" variable in assessments) and not distinguish between different property classes (although the property tax rate might still vary between property classes). The "tax reform" does not seem to have a single residential property category, which would be necessary under equitable land value taxation.

1 like, 0 dislikes
Posted by Danny Handelman on 08/10/2012 at 5:16 AM

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