A few weeks ago, I took a look at property taxation in the US, Canada, and New Zealand. I found that Auckland homes are taxed lightly by comparison – rates average 0.39% of house value. Property tax rates are twice as high in most of the other cities I looked at. In some cases – e.g. Houston, where property taxes average 2.31% of home value – they are much, much higher.

This should come as no surprise to anyone who’s read the literature. For example, Grimes and Coleman (2009) find that New Zealand under-taxes property:

McLeod et al (2001; p.26) showed that the proportion of taxation raised through property taxes was lower in New Zealand than in Australia or the United States. Taking into account all levels of government (federal, state and local), Grimes (2003) found New Zealand’s share of property taxes in government revenue was relatively low, at 5.7%, compared with a (20 country) OECD average of 8.3%. As a share of GDP, New Zealand’s property tax share was also relatively low at 1.8% compared with the average rate of 2.4%.

They go on to suggest that introducing even a relatively small land tax could result in fairly large changes to land prices. It’s intuitively sensible that higher property taxes would discourage people from bidding up prices – the more they pay for land, the more they pay in taxes!

Stu recently took a look at the same research, and some of the broader trends, and concluded that higher property taxes could take some heat off the housing market. But how much does property tax really matter for housing affordability?

To get a rough sense of the relationship, I’ve put together a chart showing the relationship between property tax rates (x axis) and Demographia’s “median multiple” measure of house prices relative to incomes (y axis). It includes data on all 59 US, Canadian, and New Zealand cities with a population over 1 million.

Notice the substantial negative correlation between property taxes and median multiples. There is a strong tendency for places with lower property taxes to have higher house prices, and vice versa. The least “affordable” places all have relatively low property taxes.

property taxes and median multiples chart 1

Overall, this chart suggests two things: First, New Zealand’s relatively low property taxes may contribute to our relatively high house prices. Notice how Auckland’s house prices seem to fit the overall trend in the data.

Second, as I’ve previously argued, Demographia’s analysis is largely meaningless as they have failed to account for the full range of explanatory variables, from interest rates to tax policies to economic fortunes.

Here’s another view on the same data. I’ve taken the natural logarithm of both variables to smooth out the relationship, and put a trend-line through the data points. This simple bit of analysis suggests that:

  • About 44% of the variations in median multiple can be “explained” by differences in property tax rates. For a bivariate regression, this is quite high.
  • The slope of the regression line suggests that, within this sample of cities, a 10% increase in the property tax rate is associated with a 4.6% reduction in the median multiple. Again, that’s a quite strong relationship.

property taxes and median multiples chart 2

I don’t think we can draw any firm policy conclusions from this data, but it certainly suggests that our low property taxes are worth investigating as a cause of our high house prices. In the words of xkcd, “Correlation doesn’t imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing ‘look over there’.”

Correlation doesn't imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing 'look over there'.

Finally, it’s worth taking a closer look at the four US cities with the highest median multiples – the top data points on the left hand side of the first chart. They are all large cities in California – San Francisco, Los Angeles, San Jose (i.e. Silicon Valley), and Sacramento (the state capitol). They provide a great illustration of why failing to account for multiple, correlated explanatory variables can undermine an analysis of house prices.

But first, a California-themed music break:

In California, state-level legislation establishes a common planning framework. There are local variations, but if one city is constrained by regulations – as San Francisco and Silicon Valley are – the rest are likely to have similar problems. To give an example, the California Environmental Quality Act, which is the state’s equivalent of the Resource Management Act, has traditionally required all new developments to assess their impact on traffic congestion and mitigate it. As a 2011 Citylab article explains, this requirement has prevented the development of space-efficient forms of housing and transport:

There’s also a great irony underlying the use of LOS [traffic Level of Service] as part of CEQA’s environmental impact checklist. It seems self-evident that bike projects are favorable to the environment, but the use of LOS to evaluate them can sometimes imply quite the opposite. The person who filed the 2005 lawsuit against the San Francisco master bike plan, for instance, suggested that because bike lanes raise LOS they also raise congestion and car idling, and thereby cause pollution.

That’s not the only contradictory aspect of LOS. Case in point: a developer whose building fails an LOS threshold can mitigate the environmental impact by widening the street, which of course would attract more cars and pollution. So instead of encouraging dense development and lower vehicle mileage — the hallmarks of a transit-first city — San Francisco’s use of LOS as part of CEQA actually discourages livable design. In a three-part series on LOS at Streetsblog, one transportation consultant called LOS the “single greatest promoter of sprawl and the single greatest obstacle to transit oriented development” in California.

However, CEQA and its absurd requirements for traffic assessments (etc) aren’t the only thing going on in California. State-level laws have also constrained local governments’ ability to raise property taxes. Proposition 13, a citizen-initiated referendum passed in 1978, caps property tax rates at 1% and fixes them to the value of the house at the time it was purchased, plus a 2% annual increment for inflation.

This has had a number of perverse effects, including stripping away funding from California’s formerly excellent primary and secondary education and setting it on a path of decline. (Prop 13 is basically exhibit A in the case against binding referenda.) It has also distorted the housing market. Because home-owners know their property taxes won’t increase if the value of their house increases, they may be more willing to speculate on capital gains.

A 1982 paper by economist Kenneth Rosen offers empirical support for this hypothesis – he found that reductions in property tax rates were almost immediately followed by proportional increases in house prices.

Consequently, it would be foolish to analyse the Californian housing market without attempting to control for both taxation and planning policy. If you only looked at one policy, your conclusions would be biased by mis-attributing the effects of the other policy. (That’s precisely what Demographia seems to have done, by the way.)

What’s true for California is also true for New Zealand. I find it hard to take seriously the claims of people who attribute housing affordability solely to regulatory policy and fail to consider the potential impact of our low property taxes.

What do you make of the data on property taxes and house prices?

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  1. It seems that property taxes could be an appropriate way to address Auckland’s speculative housing issues, as long as it did not also disadvantage home-owners. Taxing second homes a bit, third homes a larger amount, fourth homes still more etc – would surely have the effect of releasing more housing stock onto the market, and rapidly bring the house price down. Only thing that is hard there, is the admin. Do any of the cities in your examples have rules along those lines?

    1. Why shouldn’t we apply any tax to all houses. Not doing so opens up loopholes that would definitely be exploited and so not address the issues.

  2. I didn’t say we shouldn’t – i said that it could be applied more to some than to others, to discourage hoarding of property by some, and therefore restricting purchase by others. But yes, exploiting of loopholes is an issue. Was just wondering if others have tackled those issues satisfactorily.

    1. The issue is it can be extremely difficult to determine how many properties people have or even who actually owns them. This is because there are many different ways to own property. What you’re suggesting would only increase the tax burden on those who had simple ownership structures.

  3. landlords considering the purchase of a house for rental very much regard the rates. Their return on capital is the driving force.
    Older homes captured in Hamilton’s high density areas (approx 11 areas) and still essentially under the land value system, pay some astronomical rates. Eg $ 7500 for a 1950 s two bed, extreme but real.
    Regional Council rates were not mentioned but must be relevant
    Because there is so much legislative variability within each US state I’m not confident that Iwith the comparative positioning.
    Great bit of research

    1. Hello Anthony, great to see comment from you
      Two questions
      1. Could you add more detail, is this a property that is being land banked, where the $7,500 rates bill and existing council services could be shared between many dwelling.
      2. Do you have any numbers on what new areas in the HCC proposed district plan allows for more Higher density Housing.

    2. Buying to rent in Auckland is now very difficult. Rents do not cover mortgages and outgoings. Rents in central Auckland are lucky to cover half the mortgage. Landlords used to be able to look at two streams of potential income – rents and capital gain. Now it’s just capital gain. If landlords upped rents to cover mortgages, there would be a lot of people out on the street.

  4. Proposition 13 didn’t ruin California and neither did binding referenda. Political spend ups did. The cheaper land tax is one reason why Silicon Valley even exists. California state taxes increased over the period after Proposition 13 but their spending went up by far more than that. 12 years after Proposition 13 the state budget was almost DOUBLE what it was before, adjusted for inflation. The state spent more money than it got in taxes. They have some of the highest tax rates in the country and still spend more than they collect. And they blame Proposition 13? Ridiculous.

    1. If, as you say, Proposition 13 has had little effect on reining in California’s government spending, we must consider its effects from an equity and efficiency perspective instead. And there, the record is especially abysmal. Prop 13 has:
      * Increased the unfairness of the property tax system, by ensuring that young people buying first homes pay higher tax rates than older, wealthier people and long-established businesses
      * Reduced the fiscal independence of local government by reducing their ability to raise property taxes to pay for locally provided services
      * Encouraged the use of higher income and business taxes rather than property taxes, which is idiotic – when you’re “competing” for residents and businesses, it’s much better to tax immobile factors of production than mobile ones
      * Resulted in periods of extreme budget gridlock resulting from the requirement for a 2/3 supermajority in the state legislature to pass a budget or change tax policy. Fortunately, the state Democratic Party recently captured such a supermajority and proceeded to set things right budget-wise, but prior to that it caused massive issues.

      Like I said, Prop 13 is awful, and I question the sanity of anyone who would want something similar here.

      As for this: “The cheaper land tax is one reason why Silicon Valley even exists.”

      The histories of Silicon Valley that I’ve read suggest that the main drivers were the presence of Stanford University and other research institutes, large amounts of military research grants, and some fortuitous collaborations between a group of smart, entrepreneurial people. However, if tax policy played a role I’d appreciate it if you could provide me with a citation to some research to further my understanding.

    2. Personally I favour capital taxes as a simpler system and I also support increase rates for good investment. I like the idea of a universal capital tax system that Gareth Morgan has suggested. Not sure how it will work in reality though.

      I’m not saying I agree with the whole proposition 13 itself as it certainly isn’t exactly fair 35 years down the track even if there are few residential properties that have been held that long. Everyone pays the same rate (so that’s fair), but the value of the property is different. There are loopholes that should be resolved, but there is nothing wrong with restricting the government from writing blank cheques with other people’s money without approval. But blaming continual budget increases (and deficits) on P13 is ridiculous. It has nothing to do with why budgets were increased far above inflation and why the state government spent well beyond its means.There is a reason why P13 is still widely supported. Thus I see no reason to use P13 as a reason why binding referenda are bad when it isnt at fault for the situation California is in.

      I am well aware of the history of Stanford, PARC and the likes. I said cheap land because of low land taxes is one reason why silicon valley exists, not the first or only reason. P13 shifted taxes to homeowners and away from business (because the land changed hands less often). Land bankers have subleased land to many firms in the valley so these business pay miniscule land taxes. This benefits certain businesses. Obviously business tax is paid on profits not on revenue but increase land taxes for business and you increase the cost of doing business.

      1. Tech companies are not land-intensive businesses – their main inputs are skilled labour, intellectual property, and computers. Consequently, they would benefit more from higher land taxes and lower taxes on business and labour income.

        And on the binding referendum issue: I still occasionally vote in California, so let me explain to you how it works in practice. First, anti-tax activists (or, more frequently, corporations seeking to lower their tax liability) put up ballot referenda that promise to reduce taxes. People vote for them, because, hey, free money. Then, other groups put up ballot referenda to spend more money on worthy causes – education, transport infrastructure, pension funds for firefighters’ widows, etc, etc. These are generally funded from long-term borrowing rather than increased taxes, because it’s easier to promise to spend someone else’s money. People vote for these measures too, because, hey, worthy causes.

        Because _all_ referenda are binding upon the legislature, and can’t easily be reversed without another referendum, there’s no sensible way of balancing out these claims. The result is schizophrenic government.

        And, to make matters worse, we occasionally have referenda on people’s civil rights, like Prop 8 in 2008, a Mormon-funded attempt to ban gay marriage, or Prop 187 in 1994, an unconstitutional measure that would have basically required all Hispanic residents to prove their citizenship before accessing public services or healthcare.

        Switzerland, which is allegedly more responsible with binding referenda, voted in 2009 to ban the construction of minarets and didn’t grant women voting rights until 1971, after the failure of a previous referendum on the topic in the 1950s.

        So yes, binding referenda are terrible.

  5. So, it can be argued that the Council’s transport levy, albeit a tiny increase in property tax, is a small move against housing unaffordability as well as a means to fund desperately needed transport infrastructure….

    1. A levy of $99 per household per year for three years would have a very minor effect at most. Even if people are assuming that it will be indefinitely extended, then a bit of arithmetic based on current mortgage interest rates (~5.5%) suggest that it would take perhaps $1500 off the average house price.

      And because the transport levy is a flat sum, rather than being indexed to house value, it could only ever have a one-off impact on the market – the price trend will remain the same.

      1. Well that ties into my question for you.

        Any data on the effects of the fixed component of taxes (rates)?
        For instance, the variation in property price vs the fixed / variable component of the taxes and / or property value and / or median income and / or disposable income.

  6. Tinkering with rates in Auckland will only further penalise longterm residents. What your analysis is missing is the massive Auckland buy up by cash rich Chinese. Rates don’t bother them. And don’t think we have seen the end of house price rises. Auckland is only catching up with major global capitals.

    1. Yeah, that’s definitely one of my multiple working hypotheses. Unfortunately, we don’t have good data on who is buying Auckland property, or where the money is ultimately coming from, so I can’t add anything to that discussion other than uninformed speculation.

      However, I have discussed the possibility that Auckland house prices are driven by an “amenity arbitrage” – i.e. overseas buyers being attracted by our good quality of life and stable institutions: http://greaterakl.wpengine.com/2015/03/30/an-alternative-view-on-auckland-house-prices/

    2. The advantage of higher property taxes and my preference is on land value rates is that no matter who the owner is -domestic or foreign citizen they are all captured. There is no avoiding this tax as the land cannot run away. So if correlation is causation in this case and higher property taxes do lower property prices this will affect the investment decisions of foreign buyers as much as domestic buyers.

      Having said that an infrastructure tax on foreign buyers could be a good thing, for those new comers trying to take advantage of generations of amenity value -not just physical stuff like roads etc but the non physical too -stable and corrupt free legal system etc.

        1. Yes the marginal cost of development is zero. Land value taxes is a very rare tax because it doesn’t discourage economic activity.

          In fact over time it encourages economic activity. As an area becomes more popular -like say Auckland’s isthmus then land values rise, therefor land value rates rise and the incentive is for land owners to intensify so that the rates burden can be spread across more residential/commercial dwellings.

      1. Good point Brendon, I hadn’t actually thought about foreign investors getting to take advantage of existing paid for public assets (infrastructure and other amenities), I guess that could be seen as another example of privatise the profits, socialise the losses (expenses).

      2. The foreigner investers will have less difficulty paying higher taxes than locals – so it wouldn’t be a level playing field.

  7. Peter this is excellent research. It adds value and perspective to the Demographia material . The other flaw of Demographia is that it overly focuses on the Anglo world, in particular US cities. Because in the US the Federal government has had such an influence on transport funding and choices there is less variation in city development than at first appears from the Demographia data.

    1. I wouldn’t quite call it “research” – more like two hours spent on data entry and a brief literature review 😉

      I think Demographia does some useful work in collating and publishing city-level statistics on housing. As this post and others show, I often go to their publications to look for data to do a quick sanity check on hypotheses. However, Demographia’s interpretation of their data is weak and often unsupported by robust analysis, which is frustrating to see.

      1. The graph of Demographaia median multiples against property taxes was new though. I say good job and a really productive two hours!

  8. The problem with this analysis is that Auckland’s property taxes (and I believe for the Canadian cities) are not a fixed % so look really low because prices are so high. However, I agree with the overall thrust of the argument that higher land taxes tend to lower land prices. The effect seems to be strongest up to about 1.5%, which suggests an optimal level. There are two options for getting there: raise rates or reduce house prices (or both).

    1. It would be unfair and traumatic to introduce a 1.5% property value tax (or equivalent land value tax) in one go. It would need to be done progressively over several years and it would need to be nation wide to prevent local councils competing rates down.

      1. I think it’s also important to switch to rating based on land value rather than the total value of the property. The current system encourages land banking and inefficient use of land.

        1. I think property tax reform would need to done alongside of supply and demand reform for housing to get the full effect. New Zealand needs to go through a period like the reforms that bought down and stablised general price inflation in the 80s. Hopefully without the added social/economic/political trauma of that time.

          John Key will never do it. He is a status quo conservative centrist PM. Does Little or Labour have progressive centrist ambitions? If they do, there are policies out there for them.

  9. This appears to be a very strong case for increased property taxes. Politically I can see how this could be implemented in Auckland’s case, unless as a response in the aftermath and fallout from a burst in the housing market “bubble”.

    1. I humbly suggest this analysis is no reason to increase rates. At 3000 dollars and up any increase will simply price out the elderly and leave only the wealthy. Is that the livable city we want?

      1. Elderly people living alone in big houses while families struggle to buy a two bedroom unit in the sticks? Is that the city we want because it is the city we have.

        If higher OPEX on homes means that the elderly need to downsize and move to less central locations, I have no problem with that. We need to provide for the future not dwell in the past.

        1. Hope you maintain that view as u get older. A community is more than a bunch of houses.

        2. Well I am sneaking up on that demographic faster than I would like.

          I agree a community is more than houses. It is especially more than a bunch of houses filled with single elderly people.

          A community is about children interacting with other people in the area and about providing the future for those children. There is nothing sadder than an area with no children. But that is becoming more common in central Auckland as older people refuse to budge and families need to buy further and further out.

          The longer commutes then mean less family time, especially for fathers. I am saddened ever time I see someone in the Herald saying how great it is that they are now living 50kms from Auckland and driving over an hour each way. If that was me, I would only get to see my children on the weekend.

          But hey! The house was cheap.

          Providing housing only on the fringes with no high density options will only exacerbate that situation, to the detriment of family life and community.

  10. You dont discuss the channel by which high property taxes makes housing affordable. I would call it the Diaspora channel. ie A Council like our current one gets elected, they then raise rates like there is no tomorrow, everybody whom owns property sells it and buggers off to somewhere else where there is a Council that isn’t so stupid.

    1. Except that cities with high property taxes and low house prices have been attracting people, especially middle income people. In the US it is no longer ‘go west’ it is now ‘go south and go middle’. Go and find affordable housing.

      High taxes do not deter people if they get value for money. Like good city amenities for relatively low property prices.

      1. This is simply trading off CAPEX (house prices) versus OPEX (annual rates). Folks do that all the time with cars they buy (e..g deciding between an expensive new Prius versus an older second hand car with higher petrol costs), and where they live (transport costs versus house prices etc). Its horses for courses.

        With regards the house price v rates argument we have that tension in Auckland right now:

        In theory on a like for like comparison higher running cost s(with lower purchase price) suits younger working age folks, while past working-age folks want exactly the opposite.
        They want high prices on houses and very low running costs in rates – as they won’t be buying another house anytime soon but may trade down in future and and want the highest price when they do.
        And they don’t have cash in the meantime to pay higher rates.

        I also wonder how much the change from the old ACC way of setting rates (The higher of rent-able value or capital value as I vaguely recall) has changed the mixture of CAPEX and OPEX in the Central isthmus area.

        1. Older people need to realise it is the economic activity of younger people -working and in business that pays for them in their old age. Pensions and healthcare are way, way bigger than local government and transport and they come out of general taxation which younger people pay.

          Old people need to realise that screwing the scrum so that house prices are expensive is as bad for them as it is for young people because it causes an over investment in unproductive capital -existing houses and an under investment in productive capital which could be helping pay for their retirement.

          I think many people intuitively get the system is not working. They want their children and grandchildren to have the opportunities they did. Somehow we have drifted into the wrong policy settings and we need to make some adjustments.

        2. ha ha ha ha. Which is why we’re already screwed.
          By the time I retire, the population will already be in decline, virtually guaranteeing that “young people” will not be around in large enough numbers to actually fund what I’m currently funding for older people.

          Same as happened to me with student loans, and house prices.

        3. Pretty arroga t Brendan. Most of what you enjoy from freedom to infrastructure was provided by the elderly.

        4. “Most of what you enjoy from freedom to infrastructure was provided by the elderly” – What the Baby Boomers? How did they provide my freedom? Vietnam – where only volunteers were sent from NZ?

          Now their parents generation (my grandparents) – no doubt – they were a selfless generation that did all they could to pass on a better world to their children. But the BBs have done nothing to enhance my freedom, certainly not my economic freedom with student fees and lower wages.

          And infrastructure? The elderly have misspent on infrastructure for the last 60 years ever since the decision to take Auckland from a great PT city with trams and trains to an auto dependent model. I am not going to be told I have to thank them for that.

          I would thank the elderly if they had built Robbie’s Rail in the 1970s, not for building nothing but motorways for 60 years. And now the BBs in power want to continue that disastrous policy with RONs.

          Yeah thanks. For nothing.

      2. I think that is the free rider principle. Younger people go where they can get transport for cheap because it is paid for by others. That seems to be the current Council’s view. Tax proprty owners and spend it on those who move around a lot. In part it is because we allow people who pay no rates to vote. Why wouldn’t no-owners vote for that sort of waste? Time we put a stop to that nonsense.

        Our slogan could be “No representation without taxation!”

        1. mfwic. What buggering off to where Council isn’t so stupid? Have you left yet? Eketahuna looks cheap. Try to bring evidence to your splenic burps please.

          Here is the data, there is some net internal migration from Auckland, less than supports your suggestion of flight from a tyrannic Council. Less even than might be expected simply from those cashing their newly valuable properties and going for an easy life in the lovely rest of NZ:


        2. Patrick I am a fighter not a quitter. I am going to stick around and help get a Council that can control itself. The only good thing about the Council increasing rates by 4% without any consultation is that a future Council will be able to drop rates by the same or greater without any consultation. How will you feel when that happens and they do it simply to cut transport funding?

        3. Ain’t gonna happen, especially while we have a government blowing our taxes so stupidly in this sector. Why not direct your ‘fight’ to where it really needs to go?

        4. I have never supported the Rons but at least I will get to use them twice a year! By comparison I will get to pay the interest on this Council expensive vote catchers for the rest of my life. And yes it will happen. If a Council can consult on two alternatives and then ignore the outcome of that and whack us all another 4% then just a simply another Council can drop rates without consultation and cut services wholesale with a simple majority vote. Bring it on I say. And as a second front I will be lobbying Winston to help Wellsford get out of this BS supercity. My thinking is if we can chip away at the edges eventually we might actually get to vote on it.

        5. mwifc you do understand that the primary reason that these urban Council amalgamations include so much countryside is not the obvious and reasonable one that a city and its hinterland are interdependent, nor that it is fair for the dense centre to cross-subsidise the amenity of sparsely inhabited near countryside as they are likely use to for recreation etc. No. It’s simply an attempt to get enough blue voters into the whole to ensure the hegemony of the right thinking moneyed faction over all those urban liberals and the dispossessed. Who, despite other cunning efforts to disfranchise them, sometimes get their act together enough to a) vote and b) vote for the same team!

          Have you seen the proposed Wellington boundaries? They’ve added so much of the Wairarapa that it all but stretches to Hastings. They don’t want another Auckland Council on their hands where people have voted wrong, twice. That’s got to be made a mathematical impossibility.

        6. Well, Patrick, one things for sure. If the city continues to ignore the rural area with regards to infrastructure and/or environmental needs whist imposing further land use restriction as they seem keen to do, we’ll keep throwing ex ACT hacks like Penny at the city. Not that I’m personally responsible for that but I can understand why others are.

          Not that it matters anyway seeing as local body democracy is dead. It will be interesting to see how the NAGs get on now they’ve won the right to pursue their separation.

        7. I’d see this as a tension between the working of political systems – which respond, ultimately, to the median voter – and market systems – which respond to the _marginal_ buyer.

          Cities that pursue the interests of the median voter, and fail to cater for the next resident/business, tend to fail economically. City governments that disregard their voters tend to get voted out. It’s a dilemma.

        8. That’s a common myth about rates. It only takes a pretty simple supply and demand diagram to show that it doesn’t matter whether it’s the landlord or the tenant who pays rates directly. Economic theory suggests that the burden of rates is apportioned in some fraction to each party based on their comparative bargaining strength (so probably mainly tenants in this market).

  11. I don’t mind the idea of property taxes, but it’s hard to see them having a corrective effect given our current supply issues and the Government not coming to the party on badly needed deferred infrastructure. Relying on taxation as a silver bullet will come across as a cynical money-making ploy unless they’re also prepared to address other drivers of demand and the supply side in an effective way. The other issue is that if you are going to use property tax as a money spinner, it’s better to have your valuation day at the bottom of the cycle instead of at the top. It’s not hard to imagine a global credit correction having a similar effect as it did in 2008, and the US is rejecting more consumer credit applications than ever, so it’s not out of the question. I’d be wary of bringing in any new taxes now though, unless the Government is comfortable with people racking up capital losses that they can use to offset against future capital gains (which seems kind of self-defeating, really).

  12. I think you should also check out the correlation between accent and house prices. Graphing the spectrum from Texas drawl through Californian American, British English to various Antipodean accents against house prices may show a strong correlation.

    1. Yes and Auckland’s ‘rates’ or property taxes are the little green triangle on Peter’s graph of median house prices versus property taxes. What was your point?

      1. Low in dollar terms? Low compared to incomes? Low compared to potential sale prices – over which no owner has control and means bugger all unless sold. Are all contributors here renters? A % tax on perceived value would completely change the demographic of Auckland. 1.5% of a million is not a small sum….think about it.

        1. Tell you what: I’ll start advocating against higher property taxes if you sell me your house for half the CV. If you think that current property valuations are meaningless, then have the courage of your convictions and give up on the capital gains you’re sitting on!

        2. You’re missing the point completely. Whilst someone lives in a house (not looking at speculators here) the perceived ‘value’ is irrelevant. A lot of people bought their houses some time ago when the prices were reasonable. The fact that they are now ‘worth’ a million plus is of no consequence to them unless they sell. So getting all excited about hitting them with a tax based on that perceived value is nothing short of cruel. Working class people and the elderly, through no fault of their own now have homes ‘worth’ many times what they originally paid. Where would the fairness be in hitting them with a tax / rates many times what rates are now?

        3. I’m interested in knowing Peter, just what sort of Auckland you want? Comments on this blog are anti old people, tax the daylights out of anyone who owns property, crucify landlords, ignore what actually makes a healthy community (people of all generations, all walks of life, extended families, etc), and so on. What sort of Auckland do you think you will have when everything finally gets sold off to foreign ‘investors’? They will be the only ones who will be able to buy out all the old folk, buy local landlord properties and then pay the taxes and rates being proposed here. Then what do you think your rents will look like? Auckland won’t become a ghost town, but it will be filled with the uber rich (all foreign), and bugger -all kiwis. That is what cranking up taxes and rates will ultimately do. If that’s what you all want then the ‘most livable city’ just became anything but.

        4. I think it should be obvious that when I present some data on property tax rates and house prices and suggest that we may want to investigate the relationship between the two factors, I am really saying that I want to destroy the city and crush the dreams of its residents. I’d like to inhabit a barren wasteland paved with the souls of the damned. That’s my vision of Auckland: literally hell, populated only by one-percenter foreigners.

          FFS, do you get bulk discounts for all the straw men you use?

        5. I made sensible comments and you ridicule them. If you make it too hard for locals to live in their own homes, who do you think will buy them? Endless envy taxes will only impact locals. So you can FFS as much as you like, but please have a think.

        6. Fair enough. You’ve made some points that deserve a more serious response.

          I think this is the crux of the matter: “Whilst someone lives in a house (not looking at speculators here) the perceived ‘value’ is irrelevant. A lot of people bought their houses some time ago when the prices were reasonable. The fact that they are now ‘worth’ a million plus is of no consequence to them unless they sell.”

          I disagree with this statement, but on empirical rather than moral grounds.

          First, there is a fair bit of evidence that people buy houses partly for the potential of capital gain. This is pretty simple to see in action – rents are generally lower than the cost to service a mortgage on an equivalent dwelling. The gap implies that people are often, although not always, buying in the expectation that they will make money from price appreciation.

          Second, there is also evidence that increasing house prices affect people’s consumption habits. If people’s main asset goes up in value, they feel richer and tend to consume more. In some cases, they may take out a reverse mortgage against their house to pay for their spending. This implies that people do get value out of higher house prices, even if they’re not selling houses.

          And finally, I’d point to your own behaviour as evidence that people value unrealised capital gains on their houses. When I suggested that you sell your house to me for below its current market price, you got angry. That’s because your idea of what your house is worth depends in part on where the market currently is.

          In light of this, I think it’s perfectly reasonable to tax people based on the value of an asset that they own and derive ongoing benefits from.

        7. Just to clarify, I didn’t get angry over your comment to sell my house at half CV, I simply saw it as irrelevant. I have lived in in for 15 years and wish to continue doing so for many years to come. Some people buy to sell, some people buy to live and enjoy their neighbours, community etc, which is me I guess. I suspect I’m not alone.

      2. But Ricardo there is a good argument that much of the recent price increase in many areas is not unreasonable. Auckland had a very peculiar real estate value pattern in the late 20thC, with areas with natural high value being consistently undervalued, ie many inner city suburbs. Auckland defied the near universal urban pattern that expresses the power of proximity in property values through the high tide sprawl era [Pakuranga being more valued than Ponsonby FFS!]. That has been corrected in the recent boom. Also as Peter has pointed out many times there is a capitalisation of amenity value that has clearly surfaced as Auckland. Auckland now is more like the cities of Australia’s eastern seaboard. So, if this view is correct, the correction, or the end of the boom, which will happen, will not be synchronous. ie, those areas with inherent value, those with the structural advantage of proximity and great access to the rapidly accelerating city centre will not drop at all or much, and those without will be where the correction hurts.

        Interesting times. Caveat emptor.

        1. Hi Patrick. The ‘correction’ will most likely be a levelling out (if it happens at all), not a rapid drop in prices. What many don’t give enough credence to is the massive buyup by the Chinese. These people (cash rich) are looking for boltholes, and to them Auckland is cheap. There are so many more to come, advertising to the wealthy ones is rampant, and our best homes are still cheaper than many apartments in their major cities. This mass immigration will continue no matter what taxes etc are introduced by council or government. Until targeted legislation stops foreigners buying property period, the sellup and increasing prices will continue unabated. The Reserve Bank hasn’t a clue, and the Government is turning a blind eye. And the ultimate result of all this is that over time none of us debating the issues here will have anywhere in Auckland to live. We will all simply be unable to afford it, whether renters or property owners.

        2. We are naive about how a relatively small influx of money in global terms from outside the country affects our property market. Controls on foreign purchase are too lax.

        3. Unfortunately we have only anecdata on the ‘massive buyup by the Chinese’. It may indeed be massive, or it may be of little consequence. The first thing that needs to be done is collect data. I believe that the not-capital-gains-really-tax recently introduced may assist in this.

          In principle, I don’t disagree with restricting capital influx from overseas (or perhaps from domestic immigration) into predominantly new builds as a way to assist with the supply-side. But we definitely need to deal with supply-side regulation at the same time to allow density where it makes economic sense to do so.

      1. Does Hong Kong’s “lack of density controls” result in it having a median multiple below 15, and is there any city with freedom of fringe development, where density controls result in it having a median multiple of much over 3?

        Even Boston, which has density controls and fringe controls, manages an average section size of 2/3 of an acre, and a median multiple of around 6, which is about the same as many cities with fringe controls and an average section size of 1/20 of an acre.

        Obviously from the evidence, once you ration the urban footprint, site rents are more than elastic to allowed densities. In fact the correlation tends to run in the direction that the tighter the density, the HIGHER the “economic rent” gouged out of every household.

        This actually makes economic sense – would you ration the supply of bread tighter, to bring down the cost of bread per household? You would certainly succeed in getting them to consume less, but not at a lower cost. What actually happens is more and more of a bidding war for the available sites and the available space per household, just as what happens if any commodity is more rationed in its supply.

        1. There is no doubt that density can go too far (as we saw in large cities until after WW2) and where there is almost no land available, like in Hong Kong or Singapore, no amount of density will help.

          However, you have chosen the highest density city in the world as a comparison. Auckland is a long, long way from that situation and there is still a lot of return to be gained from increasing density here.

          It is the same as the argument of investment in PT/cycling versus more roads. The effect of roading projects is smaller and smaller because we have almost exclusively invested in roading for 60 years. The huge under investment in PT (and cycling is a whole magnitude more) means there are incredible gains to be realised from relatively small investment. Just look at the huge growth in PT as a result of Britomart and the Northern Busway, both relatively cheap projects.

          Auckland would realise huge gains in housing by loosening its density rules. Eventually the city will spread out, there is no doubt, but there are much easier and cheaper gains to be made from density.

          What is your objection to releasing all restrictions on up and out? We can’t have one without the other or it is just social engineering and denying choice. It is only NIMBYs protecting their patch that prevent this happening.

        2. There are plenty of cities between HK’s density and Akl’s density that illustrate the general point I am making. The correlation tends to run: the higher density, the HIGHER the median multiple or housing cost per household.

          Where did I say I oppose loosening restrictions on density? All I am saying is that this has never and will never result in median-multiple-3 affordability as long as there is constraints at the fringe.

          Houston’s CBD apartments are a heck of a lot cheaper than Auckland’s, and this is because Houston has no fringe constraints, its urban land rent curve is low and shallow and building “up” does not increase site rents. All the return on capital, is on the capital involved in actual building “up”, not a gouge of extractive economic rent from every household you can cram in on your site. There are “easy and cheap gains” to be made from density under the former conditions; but there are no cities where increased density within a boundary has done anything but force land prices up. In UK cities, for example, the land price is literally hundreds of times higher per square foot, than in median-multiple-3 US cities, and the result is average sections 1/5 the size but 10 times the price, with the housing overall being double the price.

        3. “the higher density, the HIGHER the median multiple or housing cost per household” – Only if you ignore the huge part of the world who don’t speak English.

          For example, Bucharest is one of the highest density cities in Europe and housing is cheap, even for Romanians. Though many choose to rent.

          Germany is the other obvious example, where house prices have stayed flat for decades despite high densities.

        4. “is there any city with freedom of fringe development, where density controls result in it having a median multiple of much over 3?”

          There are no restrictions on growth on the fringes of the metropolitan area of New York city. It has multiple well over 3. It also has strict density controls and could be a lot cheaper if these were liberalised.

        5. New York had median multiples below 4 until the late 1990’s when its fringes ran up against de facto green belts in the form of whole municipalities zoned “rural”.

          I flatly disagree that removing restrictions on density under these conditions will work any way other than they do in London, which is to say that site values will rise faster than floor space is added.

    1. The images in that link won’t load for me, which makes it hard to get much out of it, but I’d note for starters that he’s looking at entire states, not cities. Cities seems like a much better way of doing it; different states will have immensely different urban structures, economies and so on. Likewise, some may provide greatly different levels of service from their property tax revenues. Auckland households pay about the same rents as Northland households, but there’s a rather different mix of what that money goes on.
      And, as Greg N notes above, the house prices vs taxes thing is predicted by economic theory, based on a capex/ opex tradeoff. It’s a pretty simple discussion.
      In fact, if these Texas MUDs have their infrastructure paid off over the long term rather than being paid for up front as in NZ, that would also be one reason for lower house prices, n’est-ce pas?

    2. That analysis is flawed as it uses state-level data on property taxes, rather than data at the county or metro level. When I took a look at county-level data – the source for my graphs – I found pretty significant variations within states. For example, the average property tax rate in Texas as a whole was 1.81%. But in Harris County (which contains most of Houston), it was considerably higher – 2.31%. Conversely, NYC’s property tax rate of 0.71% is considerably lower than the average property tax for New York State as a whole (1.23%).

      It also uses a much smaller, non-randomly selected set of cities, whereas I used data on all US, Canadian and NZ cities with 1 million+ inhabitants. Those are two big statistical no-nos – non-random sampling and inappropriate aggregation of data.

      That being said, I don’t think that bivariate correlations can tell you much about causation, which is why I also referenced two academic studies of how house prices respond to changing property tax regimes.

  13. Putting more of the burden of taxation onto land (and off structures) might help.

    Mason Gaffney’s 1964 assessment of the various “Containment Policies for Urban Sprawl” still cannot really be bettered for its clarity.


    He fingers incisively, even way back then the corrupt connection between the land owning interests and blunt-instrument growth boundaries. Of course “the dominant land owning oligarchies” want growth boundaries and not land taxes and properly priced infrastructure!

    Our confusion in 2015 makes Gaffney look like an as-yet unrecognised prophet.

    1. “growth boundaries” – absolutely – it is shameless the way the older generations have put boundaries on growth in density with crazy controls like minimum lot size, minimum set back, minimum parking and maximum coverage.

      Good to see you support having these eliminated.

      1. I do support having these eliminated, on good pragmatic economic grounds – the “pricing in” of more participants to agglomeration efficiencies. But freedom of fringe development is essential to make it all work, which is why Houston is now the west’s fastest-intensifying city. Also note that Manhattan built “up” at the fastest rate during the decades that NY was sprawling cheaply for dozens of miles inland, but their urban land rent has now flipped to “extractive” and site owners behave completely differently. This article on how site owners in London think is superb and explains exactly why there is so much unintended consequences to fringe containment:


        We are stupidly turning our urban property markets into the same toxic mess.

        1. I am trying to find where I read that. This has some valid points:


          According to graph 6 in this Richard Florida article on sprawl, free market Houston has actually densified since 2000 while tightly regulated places like NYC and SF *increased* their sprawl:


        2. I don’t see how that article supports your view point:

          “One proposed solution is to loosen planning rules to flood the market with land with permission to bring down the cost. Endless urban sprawl may be acceptable in Texas and other land-rich places, but it has serious environmental, social and political implications that render it untenable in the UK. Blaming planning exclusively for land scarcity ignores the fact of concentrated land ownership in some areas, and the incentives landowners have to hold on to sites, hoping for a change a reversal in planning policy.”

          We need to offer a level playing field and let people choose where to live, up or out. If they all choose out and the city sprawls, then so be it. But there seems to be a huge appetite for walkable neighbourhoods from all demographics, not house only residential developments on the fringes. A large percentage of people (especially younger people with families) choose those out of desperation, not desire.

          I would like to see more Northern European style rail based developments like Houten in the Netherlands. But that will never happen while we are fixated on the motorway as the only worthwhile infrastructure to build.

        3. Goosoid to get Phil attention you need to describe Houten as a 1980 splatter development that expanded a 5000 person village 10 times in 25 years. Houten is next to a motorway with a connecting ring road. It also happens to have parks and bike lanes in the centre and two railway stations.

        4. Read the article. It supports my view point, it merely offers different solutions to freedom of fringe growth. I have frequently said here that we should use targeted land taxes and even compulsory acquisitions if we really need to save the planet from urban sprawl without enriching a whole lot of vested interests in urban land and the finance of it. As Mason Gaffney says, “it is no accident that (boundary) growth containment is the most popular policy in certain quarters” i.e. those with a killing to make at everyone else’s expense.

          Compulsory acquisitions are a norm in the European cities that many advocates like to use as their model, but for some reason they seem to prefer handing zero-sum gains to site owners in their own country, which also negates the value of the planning by “pricing out” potential relocators.

        5. I agree Phil, State led transport and housing projects work very well in Northern Europe and capture the value for the public coffers.

          Of course, it also worked well in the 1940s in the Hutt Valley and Wellington is still enjoying the fruits of that development with its high PT mode share.

          Unfortunately, the 1949 National government put an end to expanding that type of development to Chch and AKL as it excluded their private sector sponsors from profits and was not auto centric enough. Such a shame as we could be teaching the Danes how to do urban design if that development philosophy had been continued.

          The 1946 plan for Auckland was a fantastic concept and we would be living in a very different, and I believe better functioning, city if that had been implemented.


  14. While it is possible that property taxes could be causative wrt house prices, I dont think the above analysis makes this case.

    I think it is reasonable to assume that the relevant variable is not tax rates (i.e. as a proportion of the property value), but the tax as a proportion of income. Comparing prices to tax rates includes in the analysis the basic reality that for a given amount of tax (as a proportion of income) the tax rate will be inversely proportional to house prices. So I think this needs to be stripped out before you can make any firm conclusions.

  15. A more serious comment here Peter. Do you think maybe cities where housing is seriously unaffordable like Vancouver (top left red square) have responded by setting low property taxes because the poor sods who live there dont have as much money left over after paying mortgages or rent?

    1. That’s certainly a possibility – bivariate correlations don’t tell you much about the direction (or even existence) of causality. I’d see it as more likely that the causality runs from lower taxes to higher house prices, rather than the reverse. That seems to be what’s indicated by the literature that I’ve cited – Grimes and Coleman (2009) and Rosen (1982). But I’m not an expert in tax policy.

      However, there’s probably also some reverse causality going on. If a city starts out with lower property tax rates, and its house prices increase, policymakers will perceive less need to raise tax rates to fund increased spending. Not really a crazy story.

      1. Looking at what you are plotting I think your y-axis is a ratio of propertycost/income and the x-axis is tax/property cost so if property cost increases y increases and x decreases. So a downward slope has to occur by definition. Both x is indirectly proportional to y due to a single variable. You get a hyperbola if tax and income are correlated. ie Y=1/X

        1. Yes, this is the same point I am trying to make. The first graph looks quite hyperbolic.

        2. Ratios can be a pig to work with as you dont know which bit is driving the relationship or in this case I think so long as property prices are not a constant then the ratios here ensure endogeneity (or at least an inverse). But I think we can get there off theory. Lower taxes cause higher property prices (all else equal). If you have two identical houses either side of city boundary, one costs $10,000pa in tax and the other $1000pa then you would pay more for the cheaper tax so long as the high tax regime isnt providing you with services greater than the cost. (most high tax places I have lived in spend it on others not the tax payer ie Camden Council- the biggest bunch of Wallys I ever met). If high taxes have a negative effect on property prices then you should get a higher value for in Demographias ratio when Tax is low. But the question is “Are you worse off?” My answer is no because I am indifferent to paying interest on a loan or paying rates. It is all dead money to me. To be complete we would need to subtract the present value of taxes from housing costs in affordability ratio.

        3. I don’t think you can get there from theory. Your example is about a variation in the actual quantum of tax being faced by the property owner. I think that is the correlation that needs to be looked at (tax (normalised by income) vs property prices (normalised by income)). Lets have a look at that and then see what the graphs look like.

        4. As an interesting aside if you plot y=1/x and then fit a least squares line to the curve you get an R of -0.66 and an R squared of 0.44! Something to look out for.

        5. If you plot y=1/x on a log log graph you get a slope of -1. Given the correlation above gives a slope of -0.7, I think that implies there really is no correlation. I think the “correlation” might just be a statistical quirk.

        6. I have to agree that alarm bells rang in my head when I saw the hyperbolic relationship. This seems like the classic spurious correlation of plotting related ratios, in this case “house price / income” vs “property tax / house price”. As an exercise, I created a little spreadsheet that randomly generated 40 values for house prices (H), income (I), and property tax (T) (within similar ranges to the above data) and then plotted the H/I vs T/H relationship. Not surprisingly I got a similar looking plot to the above one – fitting an exponential curve I even got a similar r-sqrd of 0.46.

          So, while I think there is merit in this area of conversation (and the discussion has been great), it may be a case of trying to fit some different variables to demonstrate the potential relationship.

        7. I didn’t have time last night, but I’ve just gone back and re-run the graphs using house prices rather than median multiples. They show the same hyperbolic relationship, which should (I think) address the question that you guys are raising.

          This isn’t entirely surprising when you consider that:
          * Median house prices vary considerably more than median household incomes
          * Property taxes are only a part of the overall tax picture – especially in the US, where local and state governments have more fiscal powers. This means that we won’t necessarily see a direct relationship between incomes and property taxes.

          See charts here:

        8. That still leaves the issue of property tax rates being a function of house prices

          What I would be more interested in seeing is house prices (absolute or as a median multiple) vs property taxes (absolute or normalised by the median income).

        9. Bugger… those graphs are still not the right ones. That’s what I get for trying to do this first thing in the morning while still sleepy. Unfortunately, I don’t have any more time today, so it’ll have to wait for a follow-up post. Basically, I think you’ve got a point.

  16. To clarify my comment above, take for example two cities.

    City A has double the house prices of City B and also has half the property tax rate. Also City A and City B have the same median income. So house prices (median multiple) and tax rates correlate as per your analysis

    However, of course, the actual tax rate as a proportion of income is exactly the same in both cities. So the average property owner in both cities will pay exactly the same amount of property tax. Logically, the values of the properties in each city are not therefore causing the deviation in house prices between A and B.

    1. Unless you say that people with a madian income of x or y, are happy to pay a certain exact value of property tax, and therfore the rate that you set it at directly results in your house prices increasing/decreasing.

      You’re jumping to no causation, when that isn’t obvious. Unlike every single other person on here who is saying “that’s interesting, wonder whats going on”

  17. Property taxes affect housing prices in the same way that financing rates do. The lower the interest rate, they more people will spend on the house. Home buyers, at least those planning to live in the house, base their purchase price on what they can afford to pay. Often that’s flexible because good deals may materialise in the form of cheaper or more expensive houses. They factor all costs of home ownership into their decision – financing costs, taxes, any significant difference in utility costs.

    Of course, tax rates are one of many factors affecting the cost of a house, and therefore have limited effect on the overall housing market. Other things that I think are at least as important if not more so are lack of capital gains tax, the common practice of selling houses by auction, and investors looking for a place to dump money, usually offshore money, someplace where they think it will be safe and give a decent return. Also, there is an unrealistic expectation of housing size – new housing here is almost as big as it is in the US, which is at least 260 sqm/2600 sf. And on and on.

    1. What is unrealistic in housing sizes is realistic to others. For some reason contributors to this blog want to tax and legislate all their fellow Kiwis into oblivion. Who is to say what size a house should be?

      1. Ricardo, I think you’ll find most contributors here are in favour of removing legislation that controls the size of peoples houses and what they can do with their land. First up would be maximum height limits, then minimum dwelling size, then minimum set backs, then minimum parking requirements, then minimum balcony size (no shit, we have requirement that every dwelling requires a balcony or patio), and so on.

        Auckland currently has huge legal constraints on what kinds of houses people can build and we generally want those restrictions removed.

        1. The major factor that affects affordability, though, is whether the “Plans” if there are any, actually allow enough space per household to satisfy demand. Planners always think they can conduct a few surveys and do a few sums and then zone “enough” new land supply to allegedly create affordability. But it is as scientifically objective as it is possible to get, to simply say that a city with a median multiple of 6 or higher and a land value per square foot 100 times higher, has a Plan that has imposed rationing of lesser supply than everyone DOES want. Even Liverpool, where the population and employment has shrunk like Detroit’s over a similar time frame, has a median multiple over 7, and that is for an average home size not that much bigger than Japan’s.

          Auckland has nothing like the density restrictions that many US cities do; Auckland is 3 times denser than Boston and Atlanta already and is comparable to Amsterdam, Hamburg, Brussels, Ekaterinberg and Johore. Oh, and Los Angeles, which is the USA’s densest urban area; like Auckland, knocking on European densities already. Alain Bertaud on first seeing Auckland, exclaimed, “this is a European city”.

          My gut feeling is that a city with no boundaries and no density restrictions, and properly priced infrastructure, would end up at approximately Auckland’s density, but with the densities far more efficiently distributed (or concentrated). What we end up with the way we do it, is “dense sprawl”, and people “priced out”.

        2. “My gut feeling is that a city with no boundaries and no density restrictions, and properly priced infrastructure, would end up at approximately Auckland’s density, but with the densities far more efficiently distributed (or concentrated). What we end up with the way we do it, is “dense sprawl”, and people “priced out”.”

          This seems like a reasonable expectation. I’m not optimistic that removals of urban limits *alone* would be sufficient – it might allow some people to access lower-priced housing, but they’d pay for it through added transport costs. A broader liberalisation of zoning would probably be more effective, but who really knows? There aren’t a lot of examples of similar changes.

          However, part of my point here is that housing markets are complex. They’re affected by a wide range of supply-side and demand-side factors. If you want to narrow in on the effect of individual policy or market factors, you really have three options:
          1. Build an economic model that makes some simplifications but gives you a rough sense of the relationships at work
          2. Conduct a quite narrow assessment of the impact of specific, individual rules on market outcomes
          3. Conduct a statistical analysis that explicitly attempts to control for confounding factors, like property taxes and amenities, in order to isolate the effect of one particular factor among many.

          Case studies and bivariate correlations may provide some context to inform that work, but they’re not sufficient by themselves to draw robust conclusions.

        3. By what to also look “Minimum Shape Factor Circle”
          None of the Homes I has visited here in The Netherlands would fit a 15m diameter circle, normal dwelling width seems to be about 6m.

  18. Full marks Peter, obviously I am entering this discussion too late to add much. Traditionally NZ has funded more from central than from local taxes (schools, police, hospitals for example are funded locally in many countries) and we have moved from unimproved to improved value rates which further dilutes their impact. Your analysis supports the idea (but does not prove) that putting greater emphasis on land taxes would help reduce land prices.

  19. When comparing property taxes/rates across countries/cities, shouldn’t you take into account what services are provided in exchange for those rates? Different cities undoubtedly provide different services, and services not provided will have to be paid for separately. [One example is household waste… in Auckland I have to pay for my garden green waste disposal at the nearest transfer station. In the UK, this was free.]

  20. Your question is “Does adding an additional cost to housing raise the cost of housing”?
    This is on a foreign cash buyer driven speculator bull housing market -where rents will go up to cover profit and costs.

    Its a rhetorical question right?

    These people( and the corporation) that are now suggesting more taxes(” for the common man”) are the very people that created the housing problems in the first place.
    Surely you can’t expect the same people that created the housing problems to fix them (as they are part of the problem).

  21. I found that Auckland homes are taxed lightly by comparison – rates average 0.39% of house value. Property tax rates are twice as high in most of the other cities I looked at. In some cases – e.g. Houston, where property taxes average 2.31% of home value – they are much, much higher.

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