Vacant and Vacancy Tax Spreading?

   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#61  
Perhaps it might help to view this from the perspective of the local governments. Many of their ways to have budgets to meet the expanding local needs are bounded by things like California's prop 13, and supermajority requirements on tax increases. "Fees" for subsets of the population are a way to divide and conquer their funding issues.

A vacant parcel fee accomplishes a few things, besides annoying non-local vacant parcel owners, it brings in some additional revenue, and it incentivizes vacant parcel owners to take actions (build, occupy, etc.) that add either add to the tax base by higher property tax values, or by having more local spending that indirectly puts money in to the local economy.

Finally, like the hotel occupancy fees, airport fees, and car rental fees, these fees tend not to impact most voters, either because they don't own a parcel of vacant land, or they aren't local voters, or both. That makes the general political friction low.

I think that there are lots of obscure fees that ding certain subsets of the population. For my sanity, I try to bottom line the whole thing. At some level, government needs some amount of money to maintain a civil society, after that, I think that we are really just discussing what kinds of spending is or isn't appropriate, or needed, from our own perspectives. One advantage to local governments is that the spending can be more closely tied to local needs, and local ways of life and culture. We pay a variety of local fees and bonds that don't benefit us directly, e.g. bonds for schools that our kids would not be allowed to attend, etc., but I know that it helps our community, and I happen to think that is a good thing. Others disagree, and I do understand their reasoning, for the most part.

I think that compromise is never about getting what you want, but it is quite preferable to not having civil society. I once experienced two local groups literally standing on either side of a stream, and hurling rocks and boulders at each other to settle a difference between an individual in each group. Lots of injuries resulted, and I was never clear on whether the outcome was "settled". To me, it seemed on the level of "cutting your nose off to spite your face", but I think that if you look around the world, there are lots of places that have perspectives that old perceived injustices are still important, and worth dying for.

Amusing (interesting?) side story about local responses to local needs. I lived for a time in a place where marijuana was legal. There was a local person who was, well erratic, perhaps crazy in some way. Certainly, I never saw him manage to care for himself, or do any local labor. When they saw him coming towards them muttering and yelling wildly, the local response was to fire up a hash pipe and hand it to him. He hit the pipe, mellowed out, got fed, and wandered on. This was in the same area with the rock throwing incident. No real local government, and the rule of outside law was basically zero. E.g. During a multiday election (local, then state, then national polling days), the poll workers were hassled by locals on the first day, resulting in the deployment of the army with shoot on sight orders. Gave me perspective on "the strong arm of the law"...

Personally, I happily pay taxes because I have lived through some of the alternatives, and I did not like the alternatives.

Your mileage will vary!

All the best,

Peter
There is a nice 2 acre parcel at the end of my road with utilities on property.

In 30+ years it’s been a parade of owners… one was the well connected President of the community college district…

Of the dozen or so only one was able to get through design review to the point of permit… it took 3 years and then the bottom fell out of the market in 2009… he sold and retired to TN losing 200k in attempting his dream.

It’s always the same… new owner with a dream… 2-3 years pass and they cut their loss and get out.

It can take years and enormous expense to get to the point of permit ready to issue and therein lies the problem penalizing a lot owner for it being vacant.

A large home under construction nearby has never been finished… much of the year soil disturbing is off limits to construction as no soil disturbing in wet season and the delays meant the permit expired as a builder has 1 year from issuance to building final without paying/incurring added fees… during the pandemic the owner shut the project down so the lapse means new permit fees due.

Last I spoke to the son he said over 100k to reinstate plus code changes require new work… they don’t have it.

There are many that wish they never would have got mixed up in trying to build
 
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   / Vacant and Vacancy Tax Spreading? #62  
Yeah, vacant land, tractoring... seems to go together. We have 20 vacant acres SW of our town. It's zoned AG, and I have a crop of trees on it, so is it vacant?

Anyhow, I don't see that happening in Indiana and applying to farm land anytime soon.
 
   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#63  
Yeah, vacant land, tractoring... seems to go together. We have 20 vacant acres SW of our town. It's zoned AG, and I have a crop of trees on it, so is it vacant?

Anyhow, I don't see that happening in Indiana and applying to farm land anytime soon.
So far it seems confined to cities but more cities are jumping in since San Francisco vacancy tax has withstood challenges.
 
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   / Vacant and Vacancy Tax Spreading? #64  
I doubt your friends intended to lie about it. More likely they repeated something they heard from a source they thought was reputable...
I think there was a "debunking" thread here about this story some time ago. It was our close friend who told us this. They heard it from their son and his wife, who had their children in school in the Bend, OR school district.

I will see if I can learn anything further. I agree that the story roiled lots of people and circumstances, and it does sound incredibly stupid.
 
   / Vacant and Vacancy Tax Spreading? #65  
It can take years and enormous expense to get to the point of permit ready to issue and therein lies the problem penalizing a lot owner for it being vacant.
If it is prohibitively expensive to build, but taxed as a penalty if you do not build, it certainly must drive down the value of the parcels.

At a minimum I'd hope the local Assessor would agree to lower the assessed value which would lower the property tax part. Most counties have a process to do that. I've done it a few times when markets were extra volatile.
 
   / Vacant and Vacancy Tax Spreading? #66  
The Underused Housing Tax is an annual federal 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The tax generally applies to foreign national owners of housing in Canada
I have a side gig of doing taxes and bookkeeping from my home office for a few dozen clents and small businesses. i just heard about this the other day from a tax client. I'm still checking into it as it was news to me.

My understanding was that the property owner of underutilized properties (in Canada) needed to file a return / report annually to prove that the property was, in fact, being used. Or they face a 6 % (???) penalty tax, if you will ??? Client believed that this was more recently "on hold" however, so it was mostly a registration / record money grab. This was a first encounter for me of such a form requirement, and it requires notice of ALL property owners including beneficiaries. In this case, Father-In-Law added his daughter (client's wife) to the property title, so that there are less issues when things need to be sorted out, or property sold. So She is now required (apparently ?) to file the form also.
Sounds screwy to me, but he will mail in the document at this point, - if it is temporarily or indefinitely waived, so be it.

- developments, cabins, vacation homes, vacant lots, larger homes with many bedrooms, time-shares, farm land ? Yikes. The information is not very clear yet. it might be for everything other than primary residence. I'm still checking.
 
   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#67  
If it is prohibitively expensive to build, but taxed as a penalty if you do not build, it certainly must drive down the value of the parcels.

At a minimum I'd hope the local Assessor would agree to lower the assessed value which would lower the property tax part. Most counties have a process to do that. I've done it a few times when markets were extra volatile.
This is where it stands now...

Assessor has 2 years to act from the date the owner posts the appeal fee in Alameda County.

Moms landlocked backyard parcel is a pie shaped wedge valued at 1,500 yet the vacant tax would be 6k and the special assessments are more than value.

Value id so low the assessor had removed from tax rolls and a combine is not possible...

But, yes... values are plummeting and no one is buying... how can they with all the uncertainty… except the holding costs are certain at this point.
 
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   / Vacant and Vacancy Tax Spreading? #68  
I have a side gig
Scaredy,

Totally off-topic; I see you are in BC near Kamloops. I landed a small aircraft in BC once and bumped into a crew who were filming an IMAX movie. It was somewhere in your area-- I think in Kamloops? The movie was something like "the Andes" and they were using the steep mountains adjoining the river for their footage.

I've searched but never found the movie-- do you have any idea if it was produced or what the name is? I did find a Canadian Snowbirds video of a flyby in the area-- it looked quite similar although my memory was more of steep mountains on both sides of the river. But it was some time ago.

Kamloops.jpg
 
   / Vacant and Vacancy Tax Spreading? #69  
The CA legislature is bantering about legislation to apply an exit tax with a 10-year tail after someone moves from CA. If passed the departing resident would be within CA's legal and tax reach for 10 years thereafter.
What exactly are they referring to here? If someone moves to, say, North Dakota would they be subject to Calif. income tax on money they earned in N. Dak? My response to that would be the extended middle finger. Not sure how they could legally collect it.

Unless the OP is talking about something else, or I misread the articles, this real estate exit tax would only apply to those who used a state subsidy to buy their property.
San Francisco vacancy tax has withstood challenges.
Curiously, what arguments did the city make to sway the court's opinion? It would seem to me that the number of hoops needed to jump thru (that you mentioned upthread) in order to develop the land would have worked to their disadvantage. Then again, logic rarely applies to the law.
 
   / Vacant and Vacancy Tax Spreading? #70  
If someone moves to, say, North Dakota would they be subject to Calif. income tax on money they earned in N. Dak? My response to that would be the extended middle finger.
That is exactly what was done in the past. Retirees in Nevada (my parents) who were drawing a pension were subject to, and had to pay, CA income tax on the out of state pension income. But this was overturned maybe 20 (?) years ago.

What is being bantered about now is an "exit tax." I do not know the current status but negotiations ranged from a "one time" exit tax based on net worth, to a 10-year trail requiring tax contributions for 10 years after leaving. Although I suppose you could apply for an exemption if you happen to die within the 10 years. 😀
 
   / Vacant and Vacancy Tax Spreading? #71  
I remember that about Nevada back in the 90's. A lot of people would retire in California, then move to Nevada, but still have to pay California taxes on their retirement because California claimed that the money was earned in California. I was too young to pay a lot of attention to it back then, but I do remember hearing about it from people that where moving out of state and being mad about it.
 
   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#72  
You have we want it…

As Ponytug mentioned vacant property is often owned by entities without a vote in the district where the property is located.

City Council said it’s to spur development either by owner or by cratering value to make it attractive enough for another to develop.

Of course this favors those with deep pockets…
 
   / Vacant and Vacancy Tax Spreading? #73  
People can't believe this crap is EVEN legal. It reminds me of this famous quote:

"The limits of tyrants are prescribed by the endurance of those whom they oppress." -Frederick Douglass

Americans, and Californians in particular, have tremendous endurance !!!
 
   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#74  
I remember that about Nevada back in the 90's. A lot of people would retire in California, then move to Nevada, but still have to pay California taxes on their retirement because California claimed that the money was earned in California. I was too young to pay a lot of attention to it back then, but I do remember hearing about it from people that where moving out of state and being mad about it.
If he retired from California Government service very hard because with a city, county or state pension a portion was simply withheld so you would have to file to get it back or leave it.

State is the most aggressive with those leaving now if they still have a “Presence” in California after leaving.

An old car friend moved to Oregon and two of his project cars California Titled Non-Op.

California claimed since he did not transfer title to his new state that he had not severed ties with California.

Kind of hard to title a basket case but just shows the reality.

Some become so bitter they refuse to set foot in California again.
 
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   / Vacant and Vacancy Tax Spreading? #75  
It hit retired from California Government service very hard
Some of the goofy regulations apply to the residents employed by the State of CA.

A family member of mine worked for a State of CA agency. That agency was "represented" by a union. Almost all workers belonged to the union because you were automatically signed up as part of being hired. But you did have the choice to opt out.

She chose to opt out. And was promptly told that even as a non-member she would still pay union dues at 50% of full member rate. For no service or representation in return.

She asked: "what if I refuse to pay the bill?" The answer: "Governor Gray Davis passed a bill empowering the State comptroller to auto-deduct union dues from your check before it is issued to you. Whether you belong to the union or not."

This is the same official that received a $3M campaign contribution shortly before the new law was enacted.

Some things never change ....
 
   / Vacant and Vacancy Tax Spreading?
  • Thread Starter
#76  
He was recalled…
 
   / Vacant and Vacancy Tax Spreading? #79  
I own a cottage in Ontario and have had to file the UHT for 2 years now. My wife is also listed on the property deed, and she needs to file a separate (and duplicate) return. Fortunately, for seasonal cottage owners there are currently some exemptions that eliminate the 1% fee. If not for those exemptions, we would need to stay 28 nights a year, either me or her, or both of us combined (counts as 1 night). Loaning the cottage out to any of my friends or family does not count - it has to be property owner.
The first year we had to file the return, I was stumped on how I would remember the number of nights we were there - then I looked at my Google Maps and realized it tracked my every move, even our stops along the way for gas, groceries, etc. All on my Google Maps. So even if I lied and said I did stay there 28 nights, they could verify when and where I was at all times. Even my vehicle has a GPS tracker with this information, not just my phone.
 
   / Vacant and Vacancy Tax Spreading? #80  
Nobody has bothered to try to understand what these taxes are about. It's about people with tons of $$ coming into places and buying up everything and anything. It drives prices through the roof, depletes any inventory of properties, and makes living there unaffordable for long term residents and people with more normal financial means.

I first experienced this in Vancouver where foreign nationals were buyign anything and everything, at any price. If a house listed for $500k, people would show up with literally a suitcases of cash and bid up the price. Then they would leave and the house/apt/condo would sit empty. All they wanted was a place to stash money outside their home country.

That's what this is all about. Outside rich people driving locals out of the market, and making it unaffordable for them to live in their home town. The taxes are an attempt to protect locals, not punish them.

Now I'm not defending the specific solution of taxing unoccupied property. It clearly has unintended side effects, but most everything does. And if someone is just looking to hide away a bunch of money in a realestate investment, $6k per year extra isn't going to be a deterrent.

Perhaps a more constructive discussion would around policies that WOULD help the issue. Any ideas?
 

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