Victoria gets annual land valuations
The Andrews government has announced State Land Tax will be calculated annually rather than every two years, a painless inexpensive reform Prosper urges all states to adopt.
The Valuer-General’s assessment is used to calculate council rates and land tax. Valuers today use computer-assisted mass appraisal to determine what land is worth, so upgrading the biennial valuation to annual by interpolation is easy and nearly cost-less.
Land tax is the single best revenue base available to the states and a very useful automatic economic stabiliser, if it is reassessed frequently. When land prices rise or fall so does the SLT burden, tightening or easing the land market with every revision.
As land is by far the largest and most valuable asset class in Australia, the economic benefit of closely matching land taxes to market prices is profound. Holders complain about rising land tax, but not the rise in land prices that drives the tax. When Australia eventually moves into an era of falling land prices, this tax will retreat – and annual (de)valuations to match will seem way too slow.
Prosper urged Treasurer Pallas to upgrade to annual valuations in November last year when we last made congratulatory noises for his public stance on land tax. No one else is speaking out on this matter, so we think he is listening to us.
We also warmly endorsed the Treasurer’s absentee landholder surcharge here.
Thank you, Tim Pallas.