The Instigator
Blade-of-Truth
Pro (for)
Winning
6 Points
The Contender
gingerbread-man
Con (against)
Losing
0 Points

An Increase in Property Value isn't always Beneficial for the Home Owner.

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Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
Blade-of-Truth
Voting Style: Open Point System: 7 Point
Started: 3/6/2015 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 1,005 times Debate No: 71243
Debate Rounds (4)
Comments (13)
Votes (2)

 

Blade-of-Truth

Pro

The resolution is as follows:

An increase in property value isn't always beneficial for the home-owner.

First round is for acceptance only.
Second round is for opening arguments only.
Third round is for rebuttals and further arguments.
Fourth round is for rebuttals and closing statements only, no new arguments may be made in this round.

Beneficial is defined as: Favorable or advantageous; resulting in good [1]
[1] http://www.oxforddictionaries.com...

I don't believe any other key terms need clarification, but if my opposition needs further clarification, I ask that it is done in the comment section before accepting this debate.

The burden is split, with my side having to show that an increase in property value isn't always beneficial for a home owner, whereas my opposition will need to show that an increase in property value is always beneficial for the home owner.

By accepting this debate you acknowledge and agree to these rules.

**I look forward to a fun discussion on a topic which I believe is an interesting one and of value to any and all potential homeowners.**

gingerbread-man

Con

In the interests of Blade of Truth honing his thoughts out on a willing whipping boy - I accept.

This will be a tough one - one strike and I'm out.

Have fun!
Debate Round No. 1
Blade-of-Truth

Pro

I want to start by thanking gingerbread-man for accepting this debate. I wasn't aware that you had such an impressive win-loss ratio yourself :) I hope this will be a great debate!

To clarify, although this debate is split-BOP, Con has a much larger burden to uphold, as his position is that an increase in property value is always beneficial to the homeowner. If I can show one case where it isn't always beneficial, then I rightfully win the debate.

Arguments

I. An increase in property value increases the amount of property taxes that the homeowner has to pay.

Often times, we hear people say that they'd love for the value of their house to increase, that way, if they ever desire to move or sell the house, they'll make a profit on the sale considering their original purchase price was less than its current value.

For a long time, I thought that was a great thing. I mean, if I owned a house, I'd love for the property value to rise. However, a rise in property value is a double-edged sword. This is due solely to the fact that when your property value increases, your property taxes increase as well.

This can be verified through multiple sources which all share the same warning as myself, for instance, an article titled 'What Increases Property Taxes' published by SFGate under their Home Guides section has this to say:

"One of the most significant causes of property tax increases, which is also among the most controllable, is a rise in the value of a property due to home improvements. Adding a home office, finished basement, or addition to your home will undoubtedly increase its value at the time of the next assessment. Since assessments determine the value of the home, and property taxes are based on this value, a higher assessment means a higher tax bill. Other improvements, including adding a garage or shed or improving fences may also result in a higher assessed value. To combat higher assessments, taxpayers can file an appeal to request a lower assessment amount." [1]

As we can see, making improvements to your home, while increasing the value of the property itself, also results in the increase of property taxes during the next assessment. Furthermore, going through the appeal process can take a toll on your personal time and money as well in the form of legal guidance and lawyer fee's during the appeal process, all of which might not even result in the lowering of fee's if the appeal fails to be recognized.

In fact, making improvements to your home has so much potential to increase property values that some sources actually recommend not making any improvements whatsoever. For instance, an investopedia article titled '5 tricks for lowering property taxes' has their #2 trick titled "Don't Build"... in specific, it states:

"2. Don't Build - Any structural changes to a home or property will increase your tax bill. A deck, a pool, a large shed, or any other permanent fixture that is added to your home will increase your tax burden." [2]

So, now you're probably thinking, "Okay, so I won't build any additions to my home, now what?"

Well, unfortunately, it's not that simple. There are several other ways that an increase in property value can happen, and in some cases they don't serve to benefit the homeowner whatsoever.

If we return back to my original source [1] we can see that the article goes on to list another way in which property values can increase:

"Homeowners may see a rise in property taxes when the neighborhood, community or region experiences a general rise in property value. This can happen for economic reasons, such as an influx of new residents seeking jobs. Neighborhood improvements or new construction of luxury homes can also have a major effect on the assessed value of nearby property." [1]

This brings into our debate the very real scenarios that countless people have had to deal with in developing areas. I'm sure we've all heard the story of the old hermit living on a lake only to be pushed out by a development firm that wishes to build a residential neighborhood around the lake. Well, this is somewhat similar, except it is disguised by an increase in property value for the old hermit. See, the problem is that this hermit has been paying a solid $200 a month in property taxes for as long as he can remember, and after refusing to move from the lake the developers went ahead and built around him, still developing around parts of the lake where the hermits house isn't located. A small community of nice houses pops up around him, and suddenly he gets a property tax bill of $2,000 instead of $200. This is due to the new homes and sudden increase in property value brought about by this new development going on all around him. So what is he to do? Pay the additional increase of property taxes? If he doesn't have the means to do so, then there is only one option - relocate to a place that he can afford.

Even if the argument can be made that he'll at-least make a profit on his house during the sale, the fact remains that this hermit has to uproot himself from a house that he's lived in for a majority of his life. This brings about emotional distress, unneccesary moving fee's, and ultimately serves as an example of how an increase of property value, not caused by the home-owner, is far from being beneficial.

While this example is hypothetical, there are countless real-life tales of such a thing happening. For instance, in Arlingtonmagazine there is an article titled, 'Caught in the Middle', which expands on the fact that middle-class residents are being forced to move from their neighborhoods due to the rising cost of property taxes as the neighborhoods steadily increase in value. Several excerpts from the article reflect this unfortunate truth:

"Some have already made the decision to leave, for financial and philo-sophical reasons. “I don’t miss the traffic or the high property taxes, but I do miss things about Arlington—the diversity, the culture, the ethnic restaurants,” says Jay Lo Monaco, 34, a York-town High grad who now commutes 60 miles from Berryville, leaving his wife and three kids at 4:30 a.m. daily..." [3]

“I think this is one of those things that cannot be sugarcoated,” says Walter Tejada, who chairs the Arlington County Board. “This is a very high-priced area, and over time, we have become the victims of our own success." [3]

Notice the language used in that last quote - "we have become the victims of our own success". It's a true-to-form double-edged sword. Unfortunately, while they loved seeing the property values increase, they just simply couldn't keep up with the increase in property taxes that necessarily followed.

I believe that it is now apparent that an increase in property values is not always beneficial for the home-owners, the fact that with an increase in property value comes an increase in property taxes is often overlooked by many people, including myself. However, it is clear that such an increase might actually harm the home-owner if they are not capable of keeping up with the increase in property taxes as well.

Thus, it is not always beneficial for property values to increase for home-owners.

Sources

[1] http://homeguides.sfgate.com...
[2] http://www.investopedia.com...
[3] http://www.arlingtonmagazine.com...

gingerbread-man

Con

Thanks to Blade of Truth for suggesting such an interesting topic"one that will be very hard fought considering the burden of proof that is laying on Con"s side.

There are a considerable number of beneficial outcomes that can result as a consequence of the increase in the value of a homeowner"s property as my opponent has alluded to in his introduction. These include, but are not limited to:

1)Increase in the equity that you have in your home
2)Decreases the loan value ratio of your mortgage
3)Enables you to use the value of your home for security for borrowing for business or personal purposes.
4)Protects your wealth from being eroded by inflation
5)Is a form of retirement savings enabling you to down size in later years leaving surplus cash to finance living expenses.
6)It gives you more financial flexibility during times of financial hardship.

That being said, the above are not really in question for the purposes of this debate.

What is in question is if the ultimate outcome of a rise in property value negates the benefit that is derived from it.

To this end I will be concentrating on potential unfavourable outcomes and demonstrating that these outcomes do not outweigh the combined benefits derived by rises in property values and indirect benefits received by home owners from some of these outcomes.

Argument 1. " Taxes on capital as a rule are not regressive and tend to be lower than income taxes

Individuals that generate wealth through owning capital versus supplying their own labour are treated favourable in western democracies. Increases in capital values of assets are often not taxed at all as they rise, or alternatively they are exempt from capital gains tax upon disposal if they are a considered a principle place of residence.

So a rise in the value of a home owner"s property will on the whole be free of tax, or at a much lower rate than other forms of income. (1)

Argument 2 " Local Council Rates (Taxes) are relative.

The way in which municipalities generate their income from property owners is not driven by the values of properties " rather the values of properties are used as a proxy to equitably allocate costs.

Municipalities determine their budget for the year first and then allocate rate charges by the relative proportion of each property"s value.

Through this revaluation process it ensures that the eighty year old that bought their property sixty years ago for $5,000 is not paying disproportionately less rates than the new home owner that has built or bought their new home for $300,000 in the current year. (2)

Argument 3. " Homeowners still benefit from payment of taxes.

Even if rises in property values gives an impression of an increase in taxes, the services provided via these taxes come at a much lower cost due to economies of scale. If each home owner had to organise their own garbage collection, water, sewerage, library, school, law enforcement, fire services, roads, public and sporting grounds services it would come at a much higher cost than the small incremental increase caused by the rise in property value.

Taxes are a cost, but they still provide the home owner with a benefit through these services. (2)

Argument 4 " Financial risks can be managed.

As property values increase, home owners are at risk of losing a greater proportion of their wealth through mishap - eg fire, natural disaster and the like.

The costs of replacement can be often larger than the cost of the original house purchase. Fortunately financial markets have developed insurance products for a variety of potential events that can have impacts on the ability of individuals to retain their assets.

Products also extend to mortgage, health and income protection insurance to assist during times of sickness and unemployment to ensure the home owner"s greatest asset is not put at risk. Increases in insurance premiums that ensure that the replacement value of properties is factored in come at a cost of only a very small fraction of the total value of the property. (3)

So there is absolutely no question that increases in the value of homes has a knock on financial effect in other areas of a home owner"s cash flow and balance sheet. These downstream effects though in no way fully negate the benefit of increases in home values and only serve to slightly reduce the net benefit enjoyed by home owners.

(1) http://taxes.about.com...
(2)http://home.howstuffworks.com...
(3)http://en.wikipedia.org...
Debate Round No. 2
Blade-of-Truth

Pro

I thank Con for his previous round, however, I spotted several fundamental flaws in Con's approach.

My response to Con's opening claims

The first thing I immediately noticed was that Con is attempted to "shift the goalposts" [1] in regards to his Burden of Proof in this debate. This is a logical fallacy and one that is apparent in Con's opening claim that "there are a considerable number of beneficial outcomes..." Con follows this claim by listing several benefits that can come from an increase in property value for homeowners. However, even Con is aware of the shortcomings of his list which is evident in his own admission immediately following the list which stated, "That being said, the above are not really in question for the purposes of this debate." He is correct in that statement because ultimately it doesn't matter if there are numerous benefits. In this debate Con needs to show that it is *always* beneficial for the homeowner, not just that there are "numerous benefits".

Con further makes his shifting of the goalposts apparent by then stating that, "What is in question is if the ultimate outcome of a rise in property value negates the benefit that is derived from it." This is not what is in question Con. Using language such as "the ultimate outcome" once more implies that this is an "on balance" debate, when in reality it isn't. Con then confirms my suspicions of his misguided approach by saying that:

"To this end I will be concentrating on potential unfavourable outcomes and demonstrating that these outcomes do not outweigh the combined benefits derived by rises in property values and indirect benefits received by home owners from some of these outcomes."

Con literally uses the term "outweigh" which is only something necessary in debates that are "on balance" in nature. I'm now led to believe one of two possibilities: either A) Con is intentionally trying to lessen his burden by shifting the goalposts, or B) Con fails to understand that weighing the benefits to the negatives will do nothing to maintain his BOP, which is to show that an increase in property tax is *always* beneficial to the homeowner. I hope that it is the latter, because if Con is intentionally committing a logical fallacy, then this is nothing more than a display of poor conduct.

With this error of his now brought to light, I will move on to my rebuttals of his arguments.

**While I fully understand that all of his arguments are based on an "on balance" approach, to which I've responded to above, I will rebut them nonetheless in an effort to show why each fails to uphold his Burden within this debate.**

Rebuttals

I. " Taxes on capital as a rule are not regressive and tend to be lower than income taxes."

This argument fundamentally fails to uphold his burden as it includes key terms such as "often not taxed", as long as there are *some* homeowners being taxed on the increase of property value that leads to a negative outcome, my case still stands.

Furthermore, Con ends this argument by claiming that "a rise in the value of a home owner's property will on the whole be free of tax, or at a much lower rate..." but his source solely deals with people selling there home. It states nothing regarding the rise of taxes that come with an increase in property value for home owners. The opening statement of his source says:

"If you sold your main home and made a profit, you may be able to exclude that profit from your taxable income." [2]

It's clear that the article has nothing to do with his claim. Nor does it touch the key issue within this debate which regards current home owners and the outcome of an increase in property value. People who might be able to save money on the taxes that follow the profits from the sale of their home is completely unrelated due to the fact that people who sell their homes aren't the ones who this debate focuses on - which are current home owners.

II. "Local Council Rates (Taxes) are relative."

This argument actually serves to benefit my end rather than Con's. The key point in this line of argumentation was Con's statement that:

"Through this revaluation process it ensures that the eighty year old that bought their property sixty years ago for $5,000 is not paying disproportionately less rates than the new home owner that has built or bought their new home for $300,000 in the current year."

This is exactly why it is detrimental to the 80 year old, for the fact that "it ensures that he isn't paying disproportionately less rates than the new home owner that built or bought their new home for $300,000." The fact that people moved onto the surrounding land and caused his property value to skyrocket with their new homes which then brought with it an increase in property taxes, causing him to abandon his home of 60 years, is ultimately a negative for him. Hence, an increase in property value isn't *always* beneficial for the home owner.

III. "Homeowners still benefit from payment of taxes."

This is an odd argument, as Con is arguing that the increase in taxes is justified by the services it provides. However, if we are to accurately compare the pro's and con's of taxes to the services they provide, then we can't only weigh the increase in taxes against those services as a whole, but rather, we need to weigh the entire amount of taxes as a whole to the services as a whole. To be clear, if Con wishes to truly follow this line of argumentation, then he needs to weigh the services against the entire amount of taxes, not just the increase.

Furthermore, if we are continuing the example of the old hermit, I'm pretty sure he was doing just fine without whatever services the new surrounding community brings along with it, considering that he was able to live out there before they arrived. So, Con now has two different challenges to overcome within this line of argumentation in regards to his attempt at justification.

IV. "Financial risks can be managed."

Once more, Con's argument serves to actually damage his chances at maintaining his Burden of Proof. In this line of argumentation Con's key point was:

"So there is absolutely no question that increases in the value of homes has a knock on financial effect in other areas of a home owner"s cash flow and balance sheet. These downstream effects though in no way fully negate the benefit of increases in home values and only serve to slightly reduce the net benefit enjoyed by home owners."

Needless to say, Con has, himself, shown that an increase in the value of homes is not always a benefit for the home owner.

Con then goes on to say that these effects "in no way fully negate the benefit...", however, it doesn't need to "fully negate" to defeat your position but rather already defeats your burden by even having the *possibility* of negating the benefit.

Clearly, Con has presented yet another argument which serves to strengthen my position rather than his.

In closing,

I have now rebutted each argument raised by Con, as well as responded to his opening claims which were nothing more than Con committing a logical fallacy known as shifting the goalposts.

As it stands, my argument remains unchallenged, and each of Con's arguments have fallen short of fulfilling his full burden within this debate. I would also like to point out that while his sources supported his claims, his claims, in no way, supported his burden. Thus, they are moot.

Sources

[1] http://rationalwiki.org...
[2] http://taxes.about.com...
gingerbread-man

Con

Before addressing Pro"s initial arguments I will refer to his claim that I have attempted to move the goal posts.

My BOP is to demonstrate that home owners *always* benefit from a rise in house values every time they occur. It is not to demonstrate that there are no negative effects of rises of house values, rather it is to show that a home owner is always better off when houses values rise as opposed to them not rising at all.

This is similar to the way in which lottery winners *always* benefit from the event of winning despite the fact they have to pay taxes on their windfall.

Financial assets come attached with financial and taxable costs " that is inherent in their nature as can be seen in the way in which individuals and businesses incur costs to generate profits.

To suggest incurring costs that are smaller than the benefit received is not advantageous to the holder of those assets flies in the face of accepted accounting and business concepts.

There is no logical fallacy or poor conduct - as the old saying goes - you have to spend money to make money.

1.An increase in property value increases the amount of property taxes that the homeowner has to pay.

Falling property values does not preclude the need for increased property taxes. As property values are relative, towns that experience declining populations can encounter the need to raise property taxes whilst property values are falling.

This occurred in Detroit with the mass exodus of residents pulled down the property market, whilst greatly reducing the tax base of owners to tax. This erosion of the tax base was one of the key causes of the city"s bankruptcy. 1)

My opponent has failed to demonstrate that the financial position the home owner is worse than it was beforehand and thus the rise in house value has been advantageous and favourable.

The other area where this argument fails is that when a homeowner increases the value of their home through renovations or improvements, they and their family gain a favourable outcome in the living conditions of their home.
There is a direct nexus between the personal benefit and good that they receive and the associated costs that they have willingly incurred in extending their home

2.Rising property taxes affecting those on fixed or low incomes.

My opponent has pointed out that those on low incomes that own properties in desirable areas can find themselves facing an increase in their property taxes.

Unless it can be demonstrated that these taxes constitute a larger cost than the increase in their property, the homeowner still gains a benefit in the increase in the value of their home.

Although homeowners may voluntarily choose to sell up, make a profit and leave, this is not the only alternative for them.
Due to the rise in the value of their home they will be in a position to either draw down on their mortgage, or alternatively take out a reverse mortgage to assist in paying for their property taxes.

Owning a property in a desirable area is one of the best ways to generate wealth as you are no longer in a position to save from a small income and the capital increase of your property will outstrip any accumulated property taxes.

There is no need for our hermit to move and uproot himself " he just needs to visit his local bank manager " they would love to provide a tiny mortgage on a choice piece of real estate.

Finally, as a homeowner you always benefit from a rise in house values, as the other alternative " being a renter - carries with it a much greater cost. Firstly, increases in house values push the cost of your rent up and it makes purchasing a home further out of reach.

The fact that home owners own a home in itself is the benefit as the alternative is that they would be paying an ever increasing rent - one that needs to also cover the landlord"s property taxes. 2)

My opponent has demonstrated what occurs when individuals that are not astute can do when faced with an advantageous situation. Rather than staying in their established community and further benefiting from their position, they do not seek financial advice and decide to sell up and preclude themselves from continuing their good fortune. The increases in their homes have been beneficial, their decisions in response to that have not been.

I."Taxes on capital as a rule are not regressive and tend to be lower than income taxes."
Although Pro"s arguments did not extend to capital gains taxes on disposals of assets, it is still a relevant topic " as capital gains are a benefit home owners retain when they have disposed of their property that can be used in their next house purchase. Rising house values are one of the single largest sources of wealth generation for home owners and it is taxed at a very low or non-existent rate.

This point centres purely on gains and taxes on disposals and not municipal rates and taxes, as can be seen by the reference. My summation at the end of this point assumes disposal rather than retention of the home.
As the old saying goes " taxes and death are certain, each can be taken as a given " a negative outcome does not occur when taxes are incurred, rather only when the taxes levied are so regressive that they are greater than the gains received. My opponent has failed to show that this is the case.

II."Local Council Rates (Taxes) are relative."
Sixty years of inflation itself serves to distort the equitable allocation of municipal costs. Much of this difference in price has to do with inflationary pressures that do not increase the value of a home, only its price. Those on fixed incomes see much of their purchasing power eroded by inflation rather than singularly to rising values.

As mentioned earlier, the hermit has other alternatives than to pack up and sell off his home, as in my example he has built $295k in equity in his property that he did not have when he purchased it.

As can be seen from a simple property tax calculator, a huge property value increase only results in a relatively tiny property tax increase. (3)

My opponent has failed to demonstrate that municipal taxes outweigh the benefits obtained.

III."Homeowners still benefit from payment of taxes."

Pro"s argument fails as it categorises tax as being purely a cost that does not come with it attached benefits. This is clearly not the case when you look at the long list of municipal services financed by property costs.

The lack of fiscal discipline by the City of Detroit has left its residents in a very unfortunate position and one would be hard pressed to argue that insufficient rises in taxes has been beneficial for its residents.

Even if we weigh the entire amount of taxes to the services that they provide as my opponent has suggested, home owners receive a much more economical return on their costs than if they had to source and supply all municipal services themselves.

Although the hermit may have got along fine without increased services, as populations increase, service quality and diversity would also increase resulting in a further advantage to the Hermit, especially as he relies more on social services as he ages.

IV."Financial risks can be managed."

As can be seen from my opponents approach to this debate, he is of the mistaken opinion that just because there are financial costs associated with an event, that the event in itself (rise in house values) is not beneficial.

We are not here to determine whether the effects are always beneficial or not, but if the rise in values is always beneficial. To do this we have to look at the gains made, the costs incurred and evaluate if the home owner is better off than if the rise in value had not occurred at all. This is how wise financial and business decisions are made and evaluated.

1)http://en.wikipedia.org...
2)http://www.arlingtonmagazine.com...
3)http://www.fizber.com...
Debate Round No. 3
Blade-of-Truth

Pro

Addressing the opening remarks

Con's method to show how one side "outweighs" the other has no place in this debate since this is not an "on balance" debate. His Burden is to show that an increase in property value is always beneficial for the homeowner.

An issue I see immediately is that Con stated:

"My BOP is to demonstrate that home owners *always* benefit from a rise in house values every time they occur."

Both "benefit" and "house values" are not a part of his burden. Rather, it's "beneficial" and "property values" that are a part of his burden.

The reason I chose the term "beneficial" instead of "benefit" when shaping this resolution is because there is a slight difference in the definition of those terms.

Benefit: An advantage or profit gained from something. [1]

Beneficial: Favorable or advantageous; resulting in good. [2]

Furthermore, my opponent said: "house values", but this debate revolves around "property values", which can include the house value but is not solely limited to it. Once more, my opponent tries to shift his burden.

I cannot make it anymore clear that his burden is to show that "an increase in property values is always beneficial for the homeowner." Any divergence from this burden is an automatic loss for Con as he would be failing to uphold his BOP.

Rebuttals

I. An increase in property value...

"Falling property values does not preclude the need for increased property taxes."

Con is under the assumption that I think an increase *is the only way* property taxes can be increased. I merely stated one manner in which property taxes can increase, and never said it was the only way.

"My opponent has failed to demonstrate that the financial position the home owner is worse than it was beforehand and thus the rise in house value has been advantageous and favourable."

This works only under Con's faulty view of his own BOP. What matters is if the increase in property taxes that follow the rise of property value is always beneficial for the home owner. I've already presented my argument showing that it isn't always beneficial.

"... when a homeowner increases the value of their home through renovations or improvements, they gain a favourable outcome in the living conditions of their home."

While this is applicable to the homeowners willing to renovate, it dismisses all the homeowners who face property value spikes against their will. This claim from Con is null solely due to the fact that it only accounts for a small fraction of homeowners and is ultimately irrelevant to the full scope of this debate.

III. Rising property taxes affecting those on fixed or low incomes.

"Unless it can be demonstrated that these taxes constitute a larger cost than the increase in their property, the homeowner still gains a benefit in the increase in the value of their home."

False. This only works under the faulty assumption that the homeowner has enough money to cover the increase in property taxes that will follow. If they do not have the money to cover the additional property taxes, it is not beneficial for them.

"Due to the rise in the value of their home they will be in a position to either draw down on their mortgage, or alternatively take out a reverse mortgage to assist in paying for their property taxes."

All mortgages are paid back with interest. Thus, every loan is a financial loss for the person who takes it out, as they are ultimately paying more than what the original loan was for through payments with an interest rate. A reverse mortgage is nothing more than a short-term solution. In the long-run, once the mortgage runs dry the burden then falls solely on the homeowner to keep up with the increased property taxes.

Thus, drawing down on a mortgage, or taking out a reverse mortgage, does nothing to show that an increase in property value is always beneficial for the homeowner. All Con is suggesting is a means to putting off the inevitable, nothing more.

"There is no need for our hermit to move and uproot himself " he just needs to visit his local bank manager " they would love to provide a tiny mortgage."

The very fact that the hermit needs to take out a mortgage in the first place, thus losing money he'd otherwise have due to the interest rates of the mortgage, is why, in this case, it isn't always beneficial.

*Con then argues about how renting is worse than owning a home, but that entire line of argumentation is nothing more than a red herring fallacy since comparing the two is irrelevant to the scope of the resolution.* [3]

III. "Taxes on capital..."

"Rising house values are one of the single largest sources of wealth generation for home owners and it is taxed at a very low or non-existent rate."

Con is claiming that rising house values are taxed at a low or non-existent rate. The following are two articles which show the exact opposite of Con's claims:

http://www.twincities.com...

http://www.twincities.com...

The latter shows a property tax increase of 40% or more! Con's claim is nothing more than false.

Regardless of what the point centers around, it was used to strengthen Con's "on balance" approach which is irrelevant. As is his perception that I must show that the taxes are greater than the gains in house value. All I need to show is that such increases in property taxes aren't always beneficial, which I have done.

IV."Local Council Rates (Taxes) are relative."

"A huge property value increase only results in a relatively tiny property tax increase."

Con, once again, attempts to shift this into a "on balance" debate. This does not fulfill his burden. Con is merely beating a dead horse here by ignoring the select cases I've given where it isn't beneficial.

"My opponent has failed to demonstrate that municipal taxes outweigh the benefits obtained."

I haven't failed anything, as that point is a moot one that I've already responded to in previous rounds. The burden Con placed on me is nothing more than a misguided attempt from his previous round at shifting the goalposts to make this an "on balance" debate.

III."Homeowners still benefit from payment of taxes."

I never categorized taxes as being a cost with no benefits. I said it was an irrelevant cost if the original property owner doesn't need to rely on those benefits. Aside from Con ignoring my previous response, the entire line of argumentation from him was shown to be moot in my last round as it only applies to "on balance" debates.

"Although the hermit may have got along fine without increased services, as populations increase, service quality and diversity would also increase resulting in a further advantage to the Hermit."

That advantage is only applicable if the hermit can afford the spike in property taxes in the first place. Everything Con argues is somehow dependent on the assumption that they can magically afford the spike, when my whole point this entire time has been that there is no evidence to support that they can always afford such things.

IV."Financial risks can be managed."

"As can be seen from my opponents approach to this debate, he is of the mistaken opinion that just because there are financial costs associated with an event, that the event in itself (rise in house values) is not beneficial."

I never once implied that simply because there are financial costs, that the event in itself is not beneficial. What I have been arguing this entire time is that if homeowners are unable to keep up with the costs associated with an increase in their property value, then it isn't always beneficial. This is evident throughout my approach, and is supported by the cases of the hermit as well as low and middle income homeowners which I provided in previous rounds.

Sources

[1] http://www.oxforddictionaries.com...
[2] http://www.oxforddictionaries.com...
[3] http://www.nizkor.org...
gingerbread-man

Con

In conclusion I quite agree with my opponent in that this is not an "on-balance" debate. I indeed have to demonstrate, and have done so, that every time there is a property value increase, a home owner *always* in a more beneficial position compared to had it not occurred at all.

Whether or not there are marginal costs incurred does not negate the fact that the event has been beneficial and advantageous to the homeowner " and that is what is core within the resolution. My opponent has failed to address this in his rebuttals and has instead clung to a segregated view of the varying downstream effects rather than viewing the event in its entirety to determine if it is beneficial to homeowners.

In the first round my opponent believed this debate would prove valuable to potential homeowners, but by sticking to a totally non pragmatic evaluation methodology that is not employed in the financial or business world, potential homeowners would see themselves avoiding high growth properties and search instead for real estate with poor long term prospects. All to avoid a relatively miniscule cost increment compared to their much larger growth in their balance sheet.

In doing so he is forced to concentrate his efforts in nit picking over meanings of synonyms such as "benefit" vs "beneficial" or "property values" vs "house values" rather than coming up with only one real scenario where a "home owner" would truly be in a less advantageous position than they were otherwise.

Rebuttals

1.An increase in property values

"While this is applicable to the homeowners willing to renovate". This claim from Con is null solely due to the fact that it only accounts for a small fraction of homeowners and is ultimately irrelevant to the full scope of this debate."

It was my opponent himself that brought up the argument in regards to property improvements in his opening arguments using approx. 333 words to do so. To state that a rebuttal is null and irrelevant to the debate is ludicrous as I would be remiss not to provide a response. As it stands, my opponent has not rebutted that those that undertake home improvements have advantageous outcomes.

Taking the two references my opponent put forward in the last round, even those home owners whose property increases in value by just over 24 per cent only see tax increases that constitute less than one third of one percent of their house value. To suggest that this scenario is not beneficial to a home owner flies in the face of common sense and financial reasoning. (1) (2)

III. Rising property taxes affecting those on fixed or low incomes.

"This only works under the faulty assumption that the homeowner has enough money to cover the increase in property taxes that will follow".

Using once again the statistics my opponent provided, the increase in household assets far outstrips the rise in taxes by up to 155 times! (2)

Those that have a much larger asset base due to rising values are in a more than capable situation to arrange their finances not only to cover their taxes, but any other situation in their lives (health, unemployment, retirement)

"A reverse mortgage is nothing more than a short-term solution"

Due to the massive difference between the large capital and the minor tax increases in property, the gains in property values will always outstrip those of taxes. If we look at the statistics provided, if these homeowners sold their properties only a few years ago they would have forgone up to $30,000 in capital growth for the sake of saving a few hundred dollars in taxes. The rise in your property value will always outstrip that of your mortgage due to its high starting base, and the mortgage"s tiny one. (2)

The inevitable outcome of this approach is a rising property value consistently outstripping tax increases and an improved balance sheet, rather than any need to sell up and out of your community.

"Red Herring"

If we look at the context around the resolution - my opponent refers to "potential home owners" aka renters - and their potential interest in this topic. This argument is hardly a red herring as home owners are in an advantageous position by protecting themselves from inflationary rental pressures brought on by rising property values. Potential home owners need to know that they will be paying for both tax increases and property value increases if they continue to rent. This is a key advantage home owners enjoy as property values rise.

III. "Taxes on capital..."

Both of the articles my opponent has provided in his rebuttal deal with property taxes that relate to the holding of property and the associated services that local municipalities provide to the advantage and greater good of their citizens.

They have nothing to do with the low or non-existent taxes levied on capital gains realised by home owners upon disposal of their homes " a point my opponent has not been able to refute.

IV."Local Council Rates (Taxes) are relative."

The "on balance" issue once again crops here also. My opponent"s basic argument is if a home owner incurs only a single penny of additional expenses, the property value increase has not been beneficial - irrespective of what other benefits they have derived. This is not a reasonable approach and one that would lead to questionable outcomes if it was used for decision making purposes in the real world.

I will leave it up to the voters to determine which of the two interpretations of the resolution is the more appropriate for potential homeowners to find value in this debate.

III."Homeowners still benefit from payment of taxes."

Even though a home owner may not need to rely on the advantages received from the municipality that provides the services his taxes pay for, he is the beneficial recipient either directly or indirectly from better roads, utilities, schools, emergency services, security and the like.

Just as it is hard to avoid taxes that you may not want to pay"it is even more difficult to not be the beneficial recipient of their eventual distribution back into the community.

My opponent's main argument has been that payment of taxes are not beneficial to home owners, whereas this is clearly not the case, and thus his entire premise collapses.

"Magically afford the spike"

There is no need to invoke any magic when it comes to finance. When the growth in assets outstrips the growth of expenses by a factor of up to 15500% - as per the evidence provided by my opponent, - you are in an extremely advantageous position to arrange your finances to pay them.

IV."Financial risks can be managed."

"I never once implied that simply because there are financial costs, that the event in itself is not beneficial. What I have been arguing this entire time is that if homeowners are unable to keep up with the costs associated with an increase in their property value, then it isn't always beneficial."

The evidence provided by my opponent has in fact shown the great chasm that exists between the significant property value gains home owners have achieved and the comparatively miniscule increases in property taxes.

They are so far apart that even the poorest of the poor would find it more financially beneficial to retain their property via refinancing and watch year after year their wealth grow as their property value increase at a much higher rate than their mortgage balance.

To suggest that it would be more beneficial for these individuals to stay in a home that enjoys a rate of growth that mirrors their own meagre income is counterproductive.

It would leave them little opportunity to further grow their wealth, and home owners would find themselves in a long term situation that is not beneficial, not advantageous, and certainly not good.

1) http://www.twincities.com...

2) http://www.twincities.com...
Debate Round No. 4
13 comments have been posted on this debate. Showing 1 through 10 records.
Posted by whiteflame 1 year ago
whiteflame
I think I'll just leave the votes as they stand. I'm... just not in the right frame of mind to vote on this tonight. Read through about half of it, and it's just not coming together well in my head for some reason.
Posted by Blade-of-Truth 1 year ago
Blade-of-Truth
Wow, thank you for the detailed RFD Zarroette! I'll definitely take your tip into consideration for the future regarding how even the act of getting a mortgage could be a burden in and of itself. I'll also pay closer attention to my wording regarding split BOPs. I'm still somewhat new at instigating my own debates, but I'm learning more and more as I go.
Posted by Zarroette 1 year ago
Zarroette
RFD 1/4

An increase in property value isn't always beneficial for the home-owner.

Pro has to show isn"t always beneficial
Con has to show that it is always beneficial
BoP shared

RFD

I found this debate laden with some heavy economic terms and concepts, particularly from Con. If I have misinterpreted some of those terms, feel free to let me know. Also, I will be happy to revise my vote if you think I made a mistake, so please point out any mistakes you think I made, and we can discuss them.

The debate structure was unique and a bit deceptive. As Pro notes later in the debate, Con does have a huge burden of proof, given that Con has to show that an increase in property value is *always* beneficial. All Pro has to do is put past Con a single instance of this not being the case and the debate is in Pro"s favour. I am not sure why Pro elected to make the BoP shared. My interpretation of sharing the BoP means that both sides must at least make respective arguments for their side, which places a negative proof fallacy burden on Con, but Con accepted the debate. So, what I will be looking for is any argument from Pro, that is not wholly negated by Con, that shows a single instance of an increase in property is not beneficial to the homeowner. Anyway, let us have a look at the contentions.
Posted by Zarroette 1 year ago
Zarroette
=Contentions=

An increase in property value increases the amount of property taxes that the homeowner has to pay

The general argument from Pro is that an increase in property value leads to higher property taxes, thereby an increase in property value is not always beneficial to the home-owner. There were these main arguments that originally came from this:

1)If you build extra things on your property, property tax will increase
2)A hermit, living away from everything, may not want an increase in property tax
3)People may have to move due to the increased property tax on the increased value of their property

In response, Con argued that overall, an increase in property value would always be beneficial to the homeowner, even if there were some negatives included in that calculation.

Argument 1 (Taxes on capital as a rule are not regressive and tend to be lower than income taxes) showed how little individuals pay tax on a principle place of residence. Pro counters this by arguing that this argument does not meet the requirements of the resolution, due to "often not taxed" being the term by which this argument attempts to negate upon, yet the resolution would require *always* not taxed. Also, as for the latter part of Con"s argument, as Pro noted, this point focuses on people who are selling, not people who are looking to stay (which Pro does not argue).
Posted by Zarroette 1 year ago
Zarroette
RFD 3/4

Argument 2 (Local Council Rates (Taxes) are relative) showed that local taxes are scaled to be appropriate (who scales which way??) Pro counters by arguing that because people who paid less for their house now have to pay somewhat proportionally the same as people who paid more, the people who paid less could have to pay more than they can afford.

Argument 3 (Homeowners still benefit from payment of taxes) showed that there are benefits to be had from tax. Pro argued that this was not congruent: this argument for the entirety of tax, not the increase. People would still be receiving tax benefits, regardless of whether an increase is beneficial.

Argument 4 (Financial risks can be managed) showed that insurance, mortgage, health and income protection help with financial management. Pro"s counter-argument is that this only partially shows when property tax is beneficial, which by itself, is an argument for Pro.

=Round 3 and beyond=

At this point (before Con"s round 3 response), I still do not have the arguments required from Con to entirely negate the resolution. However, as Con notes again in round 3, Con"s arguments are aimed at showing that there are no "overall" negatives, in regards to the negating the resolution. In other words, whilst there may be individual arguments which could affirm the resolution, these arguments are taken out of context wherein the context makes affirming the resolution not possible. I am still not sure whether Con has negated via this method, but it is a valid route of negation.
Posted by Zarroette 1 year ago
Zarroette
RFD 4/4

In round 3, Con revisits Pro"s only original contention (An increase in property value increases the amount of property taxes that the homeowner has to pay). There is no synthesis of the four points (Arguments 1-4) that the complete nullification required to negate the resolution. They are interesting, intelligent arguments that are headed in the right direction, but they don"t quite meet the enormous BoP Con has.

Pro"s hermit point was another major contention and this point had the most potential. Pro defended his hermit"s position by appealing the short-term financial position of the hermit. However, Con merely threw suggestions as to what the hermit could do, rather than really elaborating upon them and explaining how they were beneficial. Pro"s example had the hermit not being able to financially afford the house in the first place, so Con needed to show why getting a mortgage would be beneficial (merely saying that the hermit could get one was not sufficient). The equity involved would not help the hermit afford the house spike, either, so that point does not quite negate Pro"s.

FYI (just a suggestion for Pro): I think Pro missed a trick in that he did not argue that even the suggestions themselves (e.g. the hermit should get a mortgage) would burden the hermit, who you would think, considering that hermits are recluse, would not want to be burdened with outside contact. Pro could have sealed the debate by explicitly saying that the hermit does not want to move, regardless of the money involved. But I won"t award that argument, since Pro did not make it.

=Conclusion=

I think the other, original contentions made by Pro were much closer, but Con being unable to cover the enormous burden in a negation case (due to BoP being shared) and negate the hermit example means that I have enough to make my decision. So, I vote Pro.
Posted by Zarroette 1 year ago
Zarroette
I just got around to reading this. I will be voting soon.
Posted by gingerbread-man 1 year ago
gingerbread-man
Enjoy the pizza! I'm pretty patient, so take your time.
Posted by Blade-of-Truth 1 year ago
Blade-of-Truth
Thanks for accepting man :) I won't give you the satisfaction of seeing my arguments tonight though. As it's my only day off, I'm gonna order me some pizza and get on some video games. Tomorrow night, expect my first round!
Posted by Blade-of-Truth 1 year ago
Blade-of-Truth
Also, it's only covering people who already own homes.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by Zarroette 1 year ago
Zarroette
Blade-of-Truthgingerbread-manTied
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Total points awarded:30 
Reasons for voting decision: RFD in comments. BoP was very harsh on Con...
Vote Placed by 16kadams 1 year ago
16kadams
Blade-of-Truthgingerbread-manTied
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Total points awarded:30 
Reasons for voting decision: The on balance argumentation is irrelevant. Pro only has to show one instance of increased property value not being a good thing. The resolution states "isn't always beneficial", not "is not beneficial on balance", so I must vote based upon that criteria. Con does convince me that on balance more value is a good thing, but the resolution I grade under has nothing to do with on balance. The downsides (e.g. Higher taxes) in some cases may outweigh the benefits and are a significant downside which is enough to affirm the resplution. Pro wins.