Quote:
Originally Posted by swimmer_spe
Can you explain it?
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Wikipedia can probably do better than I can.
The basic idea is to have one tax rate for land and one tax rate for property. Taxing property is bad, and we should minimize this because it disincentivizes renovations and new constriction and incentivizes land speculation and underdeveloping land.
As an example, right now in the CoV the property tax rate is 2.78‰ on the total assessed value. A split rate tax would look something like
5‰ on land
2‰ on structures
Take a look at the assessed value for BC Place:
Total Value: $222,916,000
Land: $55,422,000
Buildings: $167,494,000
If we treated BC Place as a typical residential lot under the current tax scheme, you'd tax:
$222,916,000 * 2.78‰ = $619,706/yr
If we used the above example a split rate tax, we'd tax:
$55,422,000 * 5‰ +
$167,494,000 * 2‰ =
$612,098/yr
This takes some tax liability off the building structure and places it on the land. Any future structure improvements would thereafter be taxed at a lower rate.
In the future, if tax rates must increase they should increase for land more than for buildings, and if tax rates go down for whatever reason they should drop for buildings more than for land and eventually we should aim for a 0‰ rate on buildings.
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