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. 😀
 
 
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