Let me just ask a few Q’s that pop to mind when I read Nathan Lewis’s list:
1. In 1992, the tax rate on short-term capital gains (under 2 years) on property was raised to 90%.
MY Q: why should real estate get preferential treatment when sold? This kind of tax would stop flippers
dead in the tracks. Good, I say.

2. Long-term gains were taxed at 60%.
MY COMMENT: see 1 above.

3. A 0.3% National property tax was introduced (this was several multiples greater than existing property taxes).
MY Q: Annually? COMMENT: NJ residents like myself would not mind 0.3%….

4. A City Planning Tax of 0.3%.
MY COmment: I do not know how high city planning taxes are in various states. Maybe a builder can fill me in). I’ve heard it is not cheap to get all permits across the spectrum.

5. A Registration and License Tax of 5% of the sale value of a property.
My Q; One time fee, okay, it is high. Guess home owners will think twice before moving. Flippers need not apply.

6. A Real Estate Acquisition Tax of 4%.
Again, one time fee and high imho.

7. An Office Tax of 0.25%.
Nickel-and-diming folks, there as here.

8. A Land Ownership Tax of 1.4%.
Q: One time?

At the end of the list, this:
9. Even the regular property tax, the Fixed Assets Tax, was effectively raised by several multiples.
Ok, if we are talking PROPERTY TAX we should compare regular US property tax with the Japanese equivalent.

My point basically is: property tax is insidious and though some cannot be avoided for the public services rendered, paying let’s say 2% PER YEAR based on assessed value in states like NJ is a terrific burden on home owners. Looking at public records in my small community in central NJ, I see that
your average, 60+ year old little brick house went from assessed value in yr 2000 of $ 165 000 to assessed value of $ 367 000 in 2007, last public record I can easily find. Annual property tax went from 3.1 % of a.v. ( appr $ 5100) to approx. 2% ($ 7700) of a.v. I can hear municipalities saying ” but we are lowering taxes”…..you know the spiel. The taxes are the straw that breaks the camel’s back of under water buyers….

I say let’s revamp the way schools get their funding, and let’s do away with all the home ownership tax breaks (from deductibility to cap gains), and let’s stop throwing good money after bad in form of $8000 buyer’s credits so prices can find their own equilibrium.

Ahhh……. hope over experience…. ;-)

Suburban school districts are having budget problems, resulting in larger class sizes and reductions in staff/services. Here in Mass. we have statewide standardized tests called MCAS that are published annually and school districts are ranked by performance. For family buyers in the lower home sales bracket — the only things moving right now — this makes certain communities less attractive. This creates a feedback loop that will further depress home prices in suburban communities whose schools are struggling.

There are not many home sales in affluent communities, not many foreclosures. But outside of places like Hingham, Newton, Brookline, Milton and Westwood, it will be interesting to see how this impacts working-class towns over the next few years.