[pc86]

> Retailers take on all the risk, put in the work to revitalize a neighbourhood, and their reward is that when lease renewal comes up in 10 years, it spikes and they're faced with a choice of being displaced or handing over an enormously increased part of their margins to the landlord which has done literally nothing.

This happens on the personal side as well, where property tax rates are artificially depressed - or more accurately, subsidized - until the property changes hands. When we bought our nearly 30 year old house that had had zero improvements, additions, or renovations since initial construction, our property tax bill increased 300% and has since "stabilized" to +10% a year.

What is truly insidious about this is that it's impossible to guess or estimate until you've already purchased the home, and by then it's too late to do anything about it except complain at the courthouse, which might get you a year's abatement if you're lucky.

If we let property taxes just be whatever they "should" be without penalizing home-buying in the process you could at least know what you'd be paying rather than having to factor in a 3-5x increase.

[gertlex]

> If we let property taxes just be whatever they "should" be without penalizing home-buying in the process you could at least know what you'd be paying rather than having to factor in a 3-5x increase.

I wouldn't be surprised to hear this varies by jurisdiction. In CA, which has large property tax jumps on sales thanks to Prop 13, it seems like you can know the annual property taxes in advance. The sale price is the taxable valuation* and you can find what the local tax rate is (or you can infer it pretty closely from another recently sold home's public municipal taxes paid).

So solves one problem, but is still problematic :)

*I assume this is the general case, anyways; maybe there's details I'm forgetting about separate tax rates on the land and the improvements; the split of the overall proper value between those two categories was mystifying when I bought...

[alistairSH]

Where is this?

As far as I know, my area doesn’t do that. The assessments go up over time, but there’s no large jump on transfer of ownership.

[sbuttgereit]

This is in California.

The hand-wavy explanation is that in the late 70's when this initiative passed (Prop 13), home values were rising rapidly due to an influx of people moving to the state and higher inflation rates of the times. Many people that owned homes, including those that had purchased their homes and retired, were getting priced out of their homes on the property tax rates. There are other rationales or rationalizations depending on where you come down on it. But Prop 13 was intended to slow property tax growth while you owned the property, with assessment reset to full market value at sale time.

[antonymoose]

In my experience South Carolina also does this, while it is county by county, their estimates of property value lag heavily but are readjusted after a sale.

I’ve experienced a 2-300% increase in my property taxes on the second year of home ownership as they adjust to meet the sales price.

[selectodude]

California - proposition 13.