Comment 46201

By A Smith (anonymous) | Posted August 24, 2010 at 17:03:19

If the city wants to help lift poor parts of the city, why doesn't it introduce a progressive property tax system on homes, rather than building a stadium that will benefit only those with enough disposable income to enjoy concerts and CFL games...

Scenario 1

City establishes a basic exemption on the first 50k worth of home. For people who live in areas of the city where homes average 120k, this would reduce their "taxable" home value to 70k. This home is currently charged $120k * 1.538% = $1845.60. In the progressive tax system, the tax bill would work out to $70k * 1.538% = $1,076.60, a savings of $769 and an effective property tax rate of 0.897%.

Scenario 2

A person decides to buy a higher value home, which already enjoys high market demand and is in less need of help from the government. A $450k home - $50k exemption = $400k taxable value. That $400k * 1.538% = $6,152.0 The effective tax rate on this home would be $6,152.0/$400k = 1.367%.

If the city needed to raise the top rate to make up for lost revenue it could, but the relative changes in effective tax rates would remain.

The effect of this system would be to reduce the disparity in market demand that Hamilton currently suffers from. If an area of the city fell in value, it would get a tax break, which in turn would make it more valuable again. Conversely, if an area started improving faster than other areas, it would lose some of it's tax break, making it less valuable. The taxes paid to the city would still be what is required, but it would be paid in a more balanced way, since homes would be closer in value than they are today.

Permalink | Context

Events Calendar

There are no upcoming events right now.
Why not post one?

Recent Articles

Article Archives

Blog Archives

Site Tools

Feeds