Prosper Australia

Today’s Sydney Morning Herald article on Empty Dwellings in a City Desperate for Places to Live has exposed the raft of vacancies prevalent when land banking trumps housing affordability.

It quotes how 122,211 sites were vacant in the 2006 census, reminding us of the findings from the I Want to Live Here report. Negative gearing is blamed. An inaccurate solution is offered in charging a differential rate on vacant property. This increases administrative costs. Far more effective would be to raise the overall Council Rates and use this finance to offset inefficient indirect taxes like GST and payroll taxes.
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Todays Age article on Land Tax Cuts Wont Bring Savings alerts all those interested in defending the communities right to a share of the free lunch land prices reflect. The next few weeks will see the property lobby step up their claims to pay less and less of the one tax their army of accountants can’t dodge.

Some points we agree with. The article states that the State Land Tax cuts over the last 3 years from 5% to 2.5% for the top marginal rate have been offset by rising land prices. Suprise, suprise! Lower holding charges on land encourage more speculation, especially at the top of the market, where capital gains have been higher in both percentage and nominal amounts in many suburbs.

What we do agree with is the warning on bracket creep. The Brumby government should index Land Tax rates to CPI or ultimately to land prices as calculated by the Victorian Valuer General.
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