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

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...