{"id":60429,"date":"2014-09-16T07:01:55","date_gmt":"2014-09-16T11:01:55","guid":{"rendered":"http:\/\/countingpips.com\/?p=60429"},"modified":"2014-09-16T07:01:55","modified_gmt":"2014-09-16T11:01:55","slug":"property-rights-and-property-taxes-and-countries-that-dont-have-them","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/property-rights-and-property-taxes-and-countries-that-dont-have-them\/","title":{"rendered":"Property Rights and Property Taxes\u2014and Countries That Don\u2019t Have Them"},"content":{"rendered":"<div id=\"inves-883228246\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">September 16, 2014<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><h4><span style=\"font-size: small;\">By Nick Giambruno, Senior Editor, InternationalMan.com<\/span><\/h4>\n<p>Do you really own something that you are <em>forced<\/em> to perpetually make payments on and which can be seized from you if you don\u2019t pay?<iframe loading=\"lazy\" src=\"http:\/\/trk.caseyresearch.com\/f\/?content_id=992&amp;code=PIP&amp;editorial=property-rights-and-property-taxes-and-countries-that-dont-have-them\" width=\"1\" height=\"1\" frameborder=\"0\"><\/iframe><\/p>\n<p>I would say that you don\u2019t.<\/p>\n<p>You would <em>possess<\/em> such an item, but you wouldn\u2019t <em>own <\/em>it\u2014an important distinction<\/p>\n<p>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\u2014like it\u2019s a part of the eternal fabric of the cosmos.<\/p>\n<p>I am talking about property taxes, of course.<\/p>\n<p>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 \u201cown.\u201d There is no way to pay off this obligation in one fell swoop; it stays with you for as long as you \u201cown\u201d the property.<\/p><div id=\"inves-3431591787\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>In actuality, you don\u2019t own anything which you must pay property taxes on\u2014you are merely renting it from the government.<\/p>\n<p>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\u2014or a percentage of the furniture\u2019s value\u2014in tax each year for as long as you \u201cowned\u201d it. Then suppose that for whatever reason you\u2019re unable or unwilling to pay your furniture\u2019s property tax. It won\u2019t take long for the government to swoop in and confiscate it to pay off your delinquent taxes. You get to \u201cown\u201d it as long as you pay the never-ending annual fee\u2014stop paying and you\u2019ll find out who really owns it.<\/p>\n<p>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\u2014namely their homes, offices, and raw land.<\/p>\n<p>But to me at least, the type of asset being taxed is not what makes it absurd, it\u2019s the <em>concept <\/em>of property taxes that is absurd.<\/p>\n<p>Respect for property rights and property taxes are mutually exclusive concepts. What\u2019s yours is yours, and you shouldn\u2019t need to pay the government for permission to keep it.<\/p>\n<p>It\u2019s not uncommon for people in North America and Europe to pay tens of thousands of dollars per year in property taxes\u2026 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.<\/p>\n<p>It\u2019s 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.<\/p>\n<p>And, just like the furniture example above, if you don\u2019t 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 <a href=\"http:\/\/www.caseyresearch.com\/go\/uc9pr-2\/PIP\" target=\"_blank\">10,000 people<\/a> in Pennsylvania alone lose their homes annually because they aren\u2019t able to keep up with the property taxes.<\/p>\n<p>Using the word \u201cown\u201d and \u201cownership\u201d in these contexts is the sloppy use of the word\u2014which always leads to sloppy thinking.<\/p>\n<p>Speaking of sloppy thinking, expect <a href=\"http:\/\/www.caseyresearch.com\/go\/uc9as-2\/PIP\" target=\"_blank\"><em>Boobus Americanus<\/em><\/a> to say things like \u201chow would we pay for local services like public schools if it weren\u2019t for property taxes?\u201d Of course, these services could be funded in many different ways\u2014or better, they could be provided for in the free market. But don\u2019t 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\u2014property taxes have nowhere to go but north.<\/p>\n<p>It doesn\u2019t have to be this way. You can own real estate in certain countries and can skip the annual property-tax harvest.<\/p>\n<p>I have previously written that I view <a href=\"http:\/\/www.caseyresearch.com\/go\/uc9dt-2\/PIP\" target=\"_blank\">real estate in foreign countries<\/a>\u2014along with <a href=\"http:\/\/www.caseyresearch.com\/go\/uc9gu-2\/PIP\" target=\"_blank\">physical gold held abroad<\/a>\u2014as superior vehicles for long-term savings.<\/p>\n<p>However, foreign real estate has its drawbacks. It\u2019s 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.<\/p>\n<p>Here\u2019s a list of countries that do not levy any property taxes:<\/p>\n<p style=\"text-align: center;\"><img decoding=\"async\" style=\"max-width: 537px; height: 279px; width: 100% !important;\" src=\"https:\/\/d24g2nq85gnwal.cloudfront.net\/images\/140511image1new.jpg\" alt=\"\" \/><\/p>\n<p>That\u2019s it. If you want to escape the rapacious and ridiculous property tax, these are your options.<\/p>\n<p>Ireland would have been on this list, but it recently adopted a property tax. This does not bode well for other EU countries that conceivably could face fiscal troubles and turn to property taxes as a solution\u2014like Malta and Croatia.<\/p>\n<p>Colombia, Costa Rica, Ecuador, and Nicaragua\u00a0have property taxes, but the obligations are generally negligible.<\/p>\n<p>The risk, of course, is that since a property tax is already in place in these countries it can easily be increased whenever the government decides it needs more revenue. Case in point: the bankrupt government of Greece. Consider the excerpt below from an article in <em>The Guardian<\/em>.<\/p>\n<p style=\"margin-left: .5in;\"><em>&#8220;The joke now doing the rounds is: if you want to punish your child, you threaten to pass on property to them\u2026 Greeks traditionally have always regarded property as a secure investment. But now it has become a huge millstone, given that <strong>the tax burden has increased sevenfold in the past two years alone<\/strong>.&#8221;<\/em><\/p>\n<p>The country on the list above that most interests me is the Cayman Islands, but to each his own. This is because most Caymanians are vehemently opposed to all forms of direct taxation and have never had it in their history. That attitude and history is a good guarantor that it will be very unlikely for a property tax to be imposed sometime in the future.<\/p>\n<p>In any case, buying foreign real estate is a very individualized and often complex decision\u2014but one that provides huge diversification benefits. Property taxes are but one consideration.<\/p>\n<p>You should look at foreign real estate less as a vehicle for a quick return and more as a diversified long-term store of wealth. Wherever you decide to buy, it should also be in a place that you would actually want to spend some significant time in. That way, the property has value to you, regardless of whether it proves to be a good investment.<\/p>\n<p>One expert on foreign real estate whom I\u2019d highly recommend is none other than Doug Casey, the original <em>International Man<\/em> and my mentor. Doug\u2019s been to over 175 countries and invested in real estate in a number them. He wrote a thick and detailed chapter on foreign real estate, including his favorite markets, for our <a href=\"http:\/\/www.caseyresearch.com\/go\/uc93v-2\/PIP\" target=\"_blank\"><em>Going Global<\/em><\/a> publication, which is a must-read for those interested in this extremely important topic.<\/p>\n<p>&nbsp;<\/p>\n<div id=\"xvMdV95u77zU\" style=\"clear: both;\">The article <a href=\"http:\/\/www.caseyresearch.com\/go\/uc96w-2\/PIP\" rel=\"permalink\">Property Rights and Property Taxes\u2014and Countries That Don\u2019t Have Them<\/a> was originally published at <a href=\"http:\/\/www.caseyresearch.com\/go\/uc99x-2\/PIP\">caseyresearch.com<\/a>.<\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Nick Giambruno, Senior Editor, InternationalMan.com Do you really own something that you are forced to perpetually make payments on and which can be seized from you if you don\u2019t pay? I would say that you don\u2019t. You would possess such an item, but you wouldn\u2019t own it\u2014an important distinction A ridiculous perversion of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-60429","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=60429"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60429\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=60429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=60429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=60429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}