Land Tax question?

This is a question about the logic of two opposing positions on how to apportion a single property tax bill on land that was subdivided and now owned by two people. Please read the first answer which details the question itself and post your comments.

• Answer:

  How to apportion a tax bill on a lot that was subdivided. A question of logic. I would like some opinions on the scenario below. 1) Even though the taxes apply for the current year and the original lot no longer exists, is Victor correct in arguing that because the valuation took place in the prior year, that makes a difference in how the bill should be apportioned? 2) Is Victor's argument inconsistent? 3) Is Peter correct that Victor has entangled two arguments, one irrelevant to the other? 4) What terms from logic are in play here? ie. tautology, affirmation and the like 5) Which position is correct or are there shades of gray and is a fair solution somewhere in between? ====Scenario Victor renovates a house on a large lot valued at 750K and then subdivides the land into two pieces, one small piece with the house and one big empty lot. Upon subdivision, each piece is valued at 500K for purposes of tax assessment. The house lot is subsequently sold to Peter. Shortly afterward Peter gets a tax bill of $3000 for the large lot based on the prior valuation of 750K. Peter was expecting a tax bill of $2000 for his lot valued at 500K, however he learns that the city bases current taxes on last years valuations, and so has sent only one bill for the large lot that no longer exists. Victor also was expecting a tax bill of $2000 for his lot valued at 500K but never got a bill at all. How should Peter and Victor split the single bill fairly? =====Victor's position: Since the separate empty lot did not exist at the time of the prior valuation and since empty land is worth much less when valued in that context, Peter should pay $2000 and I should pay the difference, $1000. While the current value of both lots is $1 million, at the time of the prior valuation Peter's house lot would have been worth 500K/750K or 66.6% of the original valuation. If the city had sent one bill for $4000 based on the current valuation of $1 million, it would be clear that I would owe $2000, but in the prior context, the land was worth much less. =====Peter's position: Victor is correct in that at the time no empty lot existed, however that is argument by omission. The fact is that a small lot with a house didn't exist either. It's no less fair to say that Victor's land was there all along so he should pay 66.6% or $2000 and that I should merely pay the difference, $1000. However, in my opinion Victor is entangling two separate issues: The first issue is that the bill is based on a valuation of a large lot that no longer exists. If both lots were empty it might be clearer to see that both pieces gained in taxable value, the presence of a house merely obfuscates that. Is it relevant which piece of land is better or what state of repair the house was in at the time to determine a proper valuation? Since neither party owns the original lot, neither party has a right to determine what one component is worth out of the context of the whole. We could argue about which piece gained most value as a result of subdivision, but that really is neither relevant nor satisfactorily determinable. The second issue is that the city did not send separate bills, so how do two people fairly apportion the burden in the context of a bill that was sent for a tax period occurring after the subdivision was complete and the house lot was sold. For that we have an impartial assessment that values each property equally. The bill should thus be split equally and each person should pay $1500.