Having watched this evening's news which seemed to centre around something called 'Copenhagen', it strikes me that there is a common denominator between:
a) These chaps from Pacific Islands, who, in the absence of any evidence whatsoever that sea levels are rising but which heralds The-End-Of-The-World anyway, say stuff like this:
“We know that [industrialised countries] did not respond to the calls from our leaders in New York last week. They have been responding, sympathising with our concerns. A lot of the countries are putting forwards funds to enable us carry out certain activities on mitigation, adaptation, capacity building and awareness raising..."
and,
b) Home-Owner-Ists in the UK who claim, in the absence of any evidence whatsoever that shifting the tax burden from economic activity to land or property ownership somehow heralds The End Of The World.
It's a simple fact that people who are prepared to pay for something, out of their own money, tend to value it more and look after it better than those who aren't so prepared. If it's true that these islands are sinking, well then they ought to do like the Dutch and build sea-walls, which they can pay for themselves, thank you very much. And exactly the same applies to the Home-Owner-Ists, who want everybody else to pay for all the services and benefits that accrue to them.
Monday, 7 December 2009
We own land! Give us money to make it worth more!
My latest blogpost: We own land! Give us money to make it worth more!Tweet this! Posted by Mark Wadsworth at 22:02
Labels: Global cooling, Home-Owner-Ism
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10 comments:
Can we keep the Home-Owner-Ists separate from the Home Owners please?
Not all Home Owners see their house as an investment. Some of us just want to own the place we live in. What's wrong with that? I don't want anybody else to pay for any "services and benefits" that apparently accrue to me - not do I see why I should pay for the services and benefits that accrue to rentalists.
Adam, I'm not confusing the two. The distinction may well be that true 'home-owners' don't expect tax-free capital gains or subsidies, but I suspect they are in a tiny minority.
Please don't forget that tenants don't only pay for the value of all the 'services' they get - it's included in their rent/Council Tax (including the state/NIMBY enforced scarcity value) - they also pay for the cost of publicly provided 'services' again, as the bulk of the cost is paid out of income tax etc. And tenants don't get the lovely tax-free capital gains. So they are paying twice over.
So ultimately, tenants are subsidising home-owners. I don't believe in subsidies, full stop.
Mark, you haven't really answered Adam's point.
Like him, I own my house outright, intend to stay in it for the foreseeable, and pay all my own bills.
Where's the subsidy?
WY:
1. About half the capital value of your home is the artificial scarcity value of housing in the UK. OK, that is a paper gain that is not much good to you, but it's one heck of a burden on a first time buyer. (which illustrates how pointless high house prices are).
2. You do not have to pay towards everything that makes up the value of that location, which is created by other private individuals (i.e. a house is worth more if it is near lots of businesses, shops, places of work, well behaved neighbours etc) or by the state (transport infrastructure, good policing, planning restrictions etc etc).
3. Your council tax only pays for about a fifth of the cost of publicly provided services (as distinct from the value). The rest is paid for out of all the other taxes that are collected. (It may well be that you are also an income taxpayer, in which case you are being bribed with your own money, different topic).
4. The difference between the value of what you get qua home-oqner and how much you pay for it is reflected by the price you could sell your home for minus the pure rebuild costs. If every property-owner (and not just recent purchasers or tenants) had to pay in full for the value, then house prices would always be much the same as rebuild costs.
To take another example, what is worth more, a car where you have to pay all the running costs yourself; or an identical car where the garage has promised to service and repair it, insure it and fill it with fuel for virtually free in perpetuity? The difference in price between the two = the future cost saving.
"The distinction may well be that true 'home-owners' don't expect tax-free capital gains or subsidies"
Well, I don't expect them, but I'll sure as shit take them if offered. Not that I'm convinced about any subsidies. You haven't mentioned anything that a tenant pays for that I didn't either pay for when I bought the place (other people's efforts making the place more valuable) or don't currently pay for out of council tax, income tax, VAT, NI etc etc.
"the price you could sell your home for minus the pure rebuild costs."
Surely the land it sits on and the garden are worth something, even as agricultural land.
The risk we run here is that homeowners become a hunted species and homeowner becomes a dirty word - another construct more fitted to the socialists.
B, "You haven't mentioned anything that a tenant pays for that I didn't either pay for when I bought the place (other people's efforts making the place more valuable) or don't currently pay for out of council tax, income tax, VAT, NI etc etc."
Agreed, if you are still working and paying tax, you are paying for all this indirectly and being bribed with your own money. But the family who bought the house next door is paying just as much in income tax etc PLUS it is paying a lot more than you in privately collected tax, i.e. mortgage repayments.
"Surely the land it sits on and the garden are worth something, even as agricultural land."
Yup, as farm land it is worth a couple of hundred quid - as residential land it it worth tens or hundreds of thousands. There is just no comparison.
JH: "The risk we run here is that homeowners become a hunted species and homeowner becomes a dirty word - another construct more fitted to the socialists."
There is a clear distinction between home-owners (all land has to belong to somebody) and Home-Owner-Ists.
There is less of a distinction between H-O-Ists and Socialists.
The former say "we own land so other people should work and pay taxes to fund our lifestyles" and the latter say "we are high in the party hierarchy so other people should work and pay taxes to fund our lifestyles."
Home-Owner-ists are just Socialists in blue clothing.
"privately collected tax, i.e. mortgage repayments."
Do you not mean mortgage interest payments? The repayments are just giving back the money you borrowed on the first place. Everyone has to pay, though, either by forgoing the return they would have received if they had invested the money they used to buy their home, or by borrowing that money and paying interest, or by paying rent. In some cases you might be better off investing the money and paying rent rahter than buying. I know people who have done this.
B, no I mean most of the capital mortgage payments as well.
"Everyone has to pay, though, either by forgoing the return they would have received if they had invested the money they used to buy their home, or by borrowing that money and paying interest, or by paying rent."
Exactly. Like I say, the housing market is mainly privately collected taxes. In the case of the tenant or recent purchaser, they are paying these taxes to somebody else; if you own outright then there is a notional cost but you also receive an equal and opposite amount of notional income (i.e. you pay and collect taxes).
@bayard
"Surely the land it sits and the garden are worth something even as agricultural land."
To use MW's figures: house= bricks and mortar assembled costs 70k ; land it sits on costs 100k .That is for the sterile land you sometimes see when you dig up the floor.And which no working people have been paid to produce.Pure inflation.
You then encumber young families/households with paying for this dead land for the rest of their lives with over half their mortgage payments going towards it,when they could be spending the 100k on cabin cruisers,swanky holidays and generally pissing about in a libertarian way .
This arrangement has already broken down in the USA collapsing capitalism.
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