Or inflation can result from a spike in the price of an important item in the marketplace such as oil. There has been significant inflation after every energy crisis and major increase in the price of energy.

 

You guys need a Prop 13 revolt. Our property taxes are limited to about 1.25% increases every year. Of course people move a lot here and when you buy, your base becomes your purchase price. (taxes are actually higher than pre-Prop 13 but the politiciuans won't admit it) But if you bought long ago, and don't move, your tax bill should be low. Good for senior- like Vintagers.

 

Not necessarily. Inflation is a measure of the aggregate prices. What flts is talking about is a local supply and demand thing. Land has always been prone to exceptional price increases, because unlike most things the supply is both fixed and completely local. No matter how much land is available for sale in the Yukon, and no matter how cheap it is, you can't buy it there and import it into Florida.

 

Absolutely, I agree, and I agree that land in and around resort areas, beachfront property and the like tends to appreciate at a rate faster than land elsewhere.

Still, an increase in the price of a piece of property anywhere, even along the beach from $3 million to $15 million within a two year period is extraordinary.

And yes, while inflation is the measure of aggregate prices, the aggregate is made up of all of the pieces that goes into it. If land and home were the only items increasing in price it would probably not make the point, but the increase in prices of land and homes in conjunction with everything else looks a lot like inflation to me.

 

I'm glad you highlighted the "key" words should have.

 

Our prices are market driven. I've never seen real estate go down here. While my little piece of paradise down here in Naples is just a small part of Floridas real estate boom, I assure you it's going on everywhere in Florida.

Morris we had our tax revolt years ago. If you're a Fl resident and homestead your property, they can't raise your taxes more than 1% a year. My house is valued over 1 mil. I pay less that 800 dollars a year in property tax. If you bought my house and kept it as a second residency, you'd start out paying around 30k a year in property taxes.

New construction here carries over 25k just in impact fees and we're building everywhere.

If you're in the construction industry in any form, there's all the work in the world here.

fltsfshr

I don't know if it's inflationary or not.

 

In our state, our courts have ruled that sort of tax structure violates our state constitution. It's just outright unfair that two people, living next door to each other, with identical property, pay different amounts of property taxes based on when they bought their land.

It also the kind thing that, like rent control, can backfire. You can be trapped into not being able to afford to move up (or even down!) in house size or location, because you can't afford to give up your grandfathered low tax rates.

 

All of that is very true. We are an initiative and referendum state. One of the driving reasons for the change in our state constitution to accomodate that was retirees were being taxed out of their homes and Florida likes retirees that have residency. No estate tax either or income tax either.

In addition, infrastructure has to be supplied. We have a daily influx of thousands of familys that move here. That's mores schools, roads water and sewer and other non existent infrastructure that must be built and maintained.

Interesting how it works You're right if I sell my house and go to buy one at the same or more price, then I pay tax still homesteaded but it starts at the selling price. There has been some talk of changing the current law to make such homestead rights transferable to a new home. That would be an interesting change and at that point it could probably be challenged.

The secret is to remodel, add on , don't tear it down and rebuild.

fltsfshr

 

Well, how you do things in your state is up to you. But ultimately, you are setting yourself up for either a new "tax revolt" (by the newcomers, who are tired of paying an unfair share of the burden) or a general stagnation of the economy, as new people refuse to move in. The same things that make it cheap to stay in the house impact the selling price, because the house ends up being worth less to a newcomer than it is to the person who has the low tax rates.

I suppose that if your turnover is quick enough due to death, then the whole thing might settle out. But you are really putting all your eggs in one basket when you set up your entire economy to be only about retirees.

Not my problem, I guess.

In our state we try to require developers to pay to improve the infrastructure as part of the permit process for new development, which then gets passed on as increased prices for the new houses. It is only partially successful, and it does have problems of its own. There is no easy answer for dealing with the costs of growth, but at least growth usually does indicate a healthy economy overall.

 

flts, if you buy down and live in certain counties in Calif, you can take your low base with you.
Because of the turnover in Calif. the differential in taxes from neighbor to neighbor doesn't seem to be a problem to the majority. Plus, it's been this way so long that people realize if they move the tax increase is another cost of moving.
I think that Ralper's home state doesn't have our rules. NJ residents need to wake up and make some noise.