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Originally Posted by PDXDENSITY
Could you go into detail about how some of these work? I am a total layman.
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I'm no expert either, so you'd probably better google these yourself if you're interested in understanding their intricacies. But I can give you a brief description of each as I understand it.
The various taxes all work on the same philosophical principle: they offer various ways for the city to recoup the 'unearned increment', or the profits that would otherwise accrue to speculators and other property owners wholly as a result of
public policies and investment. Recouping the added market value of property allows cities, in principle, to cushion their most vulnerable residents from the shocks of rising land values and real estate speculation.
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real estate transfer tax is a tax assessed whenever real estate changes ownership. It can include exemptions for 'first-time buyers' or for real estate of modest value. According to Wikipedia, the city of Pittsburgh has one of the highest transfer taxes in the US at 4%.
Oregon is one of relatively few states (and perhaps the only blue state) to have no statewide real estate transfer tax. [
*] However, this type of tax is banned at both the state and local level under Measure 79, passed by voters in 2012.
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capital gains tax on property transactions taxes only the profits (capital gains) realized by the seller. In South Korea, the capital gains tax on property is 50% for property sales within the first two years of purchase, but is lower for owners that hold onto their property for longer. [
*] It appears they implemented this tax after seeing how land speculation wrecked the economy of neighboring Japan.
Betterment assessments describe a wide range of taxes and fees assessed to property owners. One example is Israel's
hetel hashbacha. According to a
mortgage broker's website:
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This is a tax paid when the authorities allow a change of zoning for a neighborhood which causes the value of the property to rise. The tax is 50% of the added value to the property (as assessed by an assessor) due to the change in the zoning.... The betterment tax is paid when the owner sells the property or when he requests a building permit.
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Land value taxes have already been discussed
here.
Community land trusts are often created by residents seeking to band together to resist gentrification, but they can also be encouraged by city administrators. Deeds to properties are held nominally by the trust, a nonprofit, tax-exempt corporation, though often conveyed to individual homeowners through a long-term lease agreement. The mechanisms of the trust generally allow homeowners to own the structures built on their property and to realize a reasonable return on their investments and maintenance, while maintaining fair access to the neighborhood at affordable prices for future homebuyers.
A famous example of a land trust created in collaboration between residents and city authorities is the Dudley Street Neighborhood in Boston. You can read about it
here. Brief synopsis:
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Through DSNI’s community land trust, the Dudley neighborhood has the only permanent affordable housing in the city of Boston.
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