Property Rights and Taxes (and Places You Can Avoid Them)

Written by on May 8, 2014 in Agencies & Systems, Government with 1 Comment
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Guest Contributor Nick Giambruno |  BenSwann.com  |  May 8 2014

Do you really own something that you are forced to perpetually make payments on and which can be seized from you if you don’t pay?

I would say that you don’t.


You would possess such an item, but you wouldn’t own it—an important distinction

A ridiculous perversion of the concept of ownership and property rights has infected most of the world like a virus: something that most people unquestioningly accept as a normal part of life—like it’s a part of the eternal fabric of the cosmos.

I am talking about property taxes, of course.


You know, the annual tax you pay that is based not on whether any income was generated, but rather on the underlying value of real estate you supposedly “own.” There is no way to pay off this obligation in one fell swoop; it stays with you for as long as you “own” the property.

In actuality, you don’t own anything which you must pay property taxes on—you are merely renting it from the government.

Suppose you bought a sofa set and coffee table for your living room for $5,000 cash, and then had the obligation to pay $100—or a percentage of the furniture’s value—in tax each year for as long as you “owned” it. Then suppose that for whatever reason you’re unable or unwilling to pay your furniture’s property tax. It won’t take long for the government to swoop in and confiscate it to pay off your delinquent taxes. You get to “own” it as long as you pay the never-ending annual fee—stop paying and you’ll find out who really owns it.

While many people would correctly find a furniture property tax absurd, they also illogically find it acceptable for the government to levy an insatiable tax on different assets—namely their homes, offices, and raw land.

But to me at least, the type of asset being taxed is not what makes it absurd, it’s the concept of property taxes that is absurd.

Respect for property rights and property taxes are mutually exclusive concepts. What’s yours is yours, and you shouldn’t need to pay the government for permission to keep it.

It’s not uncommon for people in North America and Europe to pay tens of thousands of dollars per year in property taxes… just to live in their own homes. And this burden will almost certainly continue to rise. Property taxes are constantly being raised in most places, especially in places with poor fiscal health.

It’s very possible that over a lifetime, the total amount of property taxes extracted will exceed what was paid for the underlying property in the first place.

And, just like the furniture example above, if you don’t pay your property tax (AKA government rent) on the home you thought you owned, it will be confiscated. This is not as uncommon as some would believe. It was estimated that 10,000 people in Pennsylvania alone lose their homes annually because they aren’t able to keep up with the property taxes.

Using the word “own” and “ownership” in these contexts is the sloppy use of the word—which always leads to sloppy thinking.

Speaking of sloppy thinking, expect Boobus Americanus to say things like “how would we pay for local services like public schools if it weren’t for property taxes?” Of course, these services could be funded in many different ways—or better, they could be provided for in the free market. But don’t expect that to happen. In fact, given the social, political, and economic dynamics in the US and most of the rest of the West, expect the opposite—property taxes have nowhere to go but north.

It doesn’t have to be this way. You can own real estate in certain countries and can skip the annual property-tax harvest.

I have previously written that I view real estate in foreign countries—along with physical gold held abroad—as superior vehicles for long-term savings.

However, foreign real estate has its drawbacks. It’s illiquid and has carrying costs like maintenance expenses and, of course, property taxes. To diminish these costs that eat away at your real estate investment, it is essential to minimize or eliminate them.

Here’s a list of countries that do not levy any property taxes:

PropertyTaxlessCountries

That’s it. If you want to escape the rapacious and ridiculous property tax, these are your options.

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  1. andre-leonard@usa.com' Andre Leonard says:

    People are born to be slaves of the government. It is very hard to change the system with our current form of government. The only hope I see on the horizon is the spreading of the Libertarian Party form of government which is smaller, less imposing government. Meanwhile, pay we must.

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