Posted by: Bull_Dozer
Not sure if I am reading your posts correctly - but I think you guys saying that it is BS when your property taxes go up $500 despite the fact that your house also went up in value $100k on the basis that you have no way of affording the extra tax? If your net worth has gone up $100k and you supposedly can't afford another $500 of property taxes then you aren't very financially sophisticated. And are people that own detached houses really living paycheque to paycheque? Pretty sure they wouldn't qualify for the mortgage if that were the case. And if they are living paycheque to paycheque, they should sell the house, pocket the very significant amount of cash (gain is earned tax free) and then buy a cheaper place.
Property taxes are ridiculously low. You know what gets taxed way more than your house? Employment income. Kind of depressing to think that someone who makes $100k but rents pays $25k in income tax but the "housewife" or "student" homeowner only pays a few thousand bucks of property tax a year despite having a six-figure tax-free (unrealized) gain on the value of their house. And who consumes more social services (and other government related spending) - the guy living in a 1 bedroom apartment or the person living in the detached house...
Why are we conflating property taxes with asset valuation? City does it because it’s an easy way to justify a cash increase, but property taxes are meant to fund local services. https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax There is a property transfer tax that is built around the asset sale. That one stings.
Theoretically, if the city or district’s service level has remained static, then regardless of the home owners net worth, property tax shouldn’t be a punitive form of taxation based on that net worth increase. But KenN is right, homeowners got a fancy new lawsuit for their tax hit this year. That’s neat I guess.
Now, if you’re wanting property tax to act as a form of wealth tax, I’d suggest that’s a different topic and we’d have to look at total net worth (ALL assets and liabilities) and go at it holistically and in progressive structure. That’s still gonna screw over the fixed income pensioner living in a 3M$ tear down in Kits that she bought in 1965, but she can defer that tax payment, so probably all good.