You’re definitely not misunderstanding anything. I guess I was imagining that the highest bid usually wouldn’t be less than ~75% of the true property value, and this is fine. But you may be right that the highest bid could be much lower than that, if it’s just not worth people’s time to bid.
but then the owner would almost never want to sell through the bidding system
I guess I never clarified that I’m imagining this is the only legal way to sell property.
A few ideas:
For any given house, in any given year, there is a 1/1000 chance that the house is given to the highest bidder at the price they’ve bid, and the government pays the owner double that price as well (so they get triple the price).
Predictors try to predict the what price the property will have when it is next sold. (And maybe the number of years of price history and the number of neighbors has to be increased)
The government supplements long-standing bids (at say 1% a year), so if a property has had a recent inspection (which is tax-encouraged), and you can lower bound its value, you may as well put in a bid early at around that lower bound, in the hopes that it’s not much more valuable than that, and by the time the owner want to sell, your bid will be inflated for free.
Do you think any of these are workable?
ETA:
Or I guess the property owner could set the price, and anyone could buy at the listed price. Absent game theory stuff, this price could be way too high, since they’re not paying property tax according to this price, which is why I didn’t go for this in first place. But if people do this, they’d incur the wrath of their neighbors, whose property taxes would go up. If the social pressure isn’t enough, the fear that their neighbors might retaliate by setting their own property prices way too high could encourage people to set more appropriate prices for their property. This might have costs to social cohesion… I guess you could also add a 0.1% tax on the listed value of the property.
ETA:
I’m liking the last possibility more and more. I think the fairest way for a homeowner’s association to make sure no one is overinflating the price of their property would be to recruit an independent consultant to estimate the value of everyone’s properties, and then require that nobody set the price of their property more than, say, 30% higher than the consultant’s estimate. That outcome would, of course, be excellent for the government.
You’re definitely not misunderstanding anything. I guess I was imagining that the highest bid usually wouldn’t be less than ~75% of the true property value, and this is fine. But you may be right that the highest bid could be much lower than that, if it’s just not worth people’s time to bid.
I guess I never clarified that I’m imagining this is the only legal way to sell property.
A few ideas:
For any given house, in any given year, there is a 1/1000 chance that the house is given to the highest bidder at the price they’ve bid, and the government pays the owner double that price as well (so they get triple the price).
Predictors try to predict the what price the property will have when it is next sold. (And maybe the number of years of price history and the number of neighbors has to be increased)
The government supplements long-standing bids (at say 1% a year), so if a property has had a recent inspection (which is tax-encouraged), and you can lower bound its value, you may as well put in a bid early at around that lower bound, in the hopes that it’s not much more valuable than that, and by the time the owner want to sell, your bid will be inflated for free.
Do you think any of these are workable?
ETA:
Or I guess the property owner could set the price, and anyone could buy at the listed price. Absent game theory stuff, this price could be way too high, since they’re not paying property tax according to this price, which is why I didn’t go for this in first place. But if people do this, they’d incur the wrath of their neighbors, whose property taxes would go up. If the social pressure isn’t enough, the fear that their neighbors might retaliate by setting their own property prices way too high could encourage people to set more appropriate prices for their property. This might have costs to social cohesion… I guess you could also add a 0.1% tax on the listed value of the property.
ETA:
I’m liking the last possibility more and more. I think the fairest way for a homeowner’s association to make sure no one is overinflating the price of their property would be to recruit an independent consultant to estimate the value of everyone’s properties, and then require that nobody set the price of their property more than, say, 30% higher than the consultant’s estimate. That outcome would, of course, be excellent for the government.