>A core idea is that a house sells for a positive value. But that presumption is likely false. Houses at unattractive places in poor condition might actually represent a negative value.
This reminds me of an incident in Vancouver, where the city sought to expropriate single room occupancy (SRO) hotels (read: slums). They felt that each property was worth negative value, but they estimated the value as $1 because:
> We are unaware of any instances of property being transferred with a negative value. Therefore, a value of $1.00 is concluded for the subject property with the knowledge that a purchaser would be required to assume the financial obligations with either holding or demolishing and redeveloping the property.
Yes, exactly. In Germany a house is to start with rather a negative value, only the ground counts. You pay for the ground minus the costs for demolishing the house, or bring it a a current standard, or up to your taste.
Of course you will be able to still an get a positive value for an (old) house if it's somehow an enthusiast's object, who wants exactly this: An old Italian small village house or a German architect's house from the 70ies.
There are indeed many places where the land value is effectively zero and the building is also worthless. But offers like these often have other obligations so the 1 euro cost is not the all in price.
Most dramatic example of this I've seen is the US Navy selling off their decommissioned aircraft carriers for $0.01. But, as you say, the purchase price is not the real expense of buying one. For these ships, it's the millions of dollars it takes to tow it to your scrap yard and tear it apart.
It's interesting as a thought experiment. You can easily make any house $1 with the "right" tax code. So I'm definitely curious about the situation here.
> Imagine the following...you pay $500 today and commit to receiving an escort at your house in 15 days. Cos your wife is traveling. This is called a futures contract.
> Unfortunately, lockdown came and your wife will be home for the next 60 days.
> You do not want this woman to show up at your house at all and try to pass this futures contract to someone else.
> Only you cannot sell this commitment because nobody can receive the escort at home anymore. Everyone is in full storage with wife.
> To make matters worse, not even the pimp (Chicago Mercantile exchange) has more room to receive girls because his house is crowded with girls.
> So you will pay anyone just to take the girl off your hands.
2020 copypasta, because its more relatable than futures and of course, "sex work is work" an inclusive phrase for the workers that choose that trade, immunizing us from criticism for making the analogy at all, hurray!
Why should immovable property differ from moveable property. How many things are sold for 1 EUR, just because everything else would be too difficult. Often those things have value that is only specific to the buyer and have negative value for the seller. The process for declaring something actually worthless and paying for waste removal is so much, but also gifting something to someone is often so much more difficult than selling for the lowest possible price that all stupid booking systems accept and that dictate what we may do.
If geography is a factor in the value of an asset, being able to move that asset allows you the ability to effect change in the value of it. I.e., my car might sell for x in one city, but only 0.7x in another.
As an immovable asset's value cannot be changed in the same ways as a movable one's, perhaps there are different ways to tax it that are still fair, or encourage positive social effects.
In this specific case the 1 EUR home is a blight in the community that makes the whole place less attractive, so it makes sense you'd have to "pay" someone to take it and fix it because it creates negative value for the rest of the place.
That is likely to lead to moral hazard issues though so i doubt it would work in the real world.
All I am saying is that while this makes sense, there is probably some stupid IT system or regulation wording, rather some moral constraints that resets things to 1 EUR.
This is exactly the point - there is a strong expectation of positive values, so just saying 1 EUR makes it easy.
IMHO this is a defect of the system as some houses has the value -50.000 EUR and should be sold on the market for that - I should get 50.000 EUR to take over the house.
In particular, as we develop building- and decomissionning codes, these impose a liability of people to decommission.
While radically liberal market forces told us that we can buy land and have full control, that was never really the case, and we are waking up to the issues of irresponsible and harmful pollution.
Houses at unattractive places in poor condition might actually represent a negative value.
As such, even 1 EUR houses might be severely over-valued.
It should be interesting as tax code could also take that into consideration.