Stamp Duty to Land Tax: Designing the Transition
Most policy experts agree the reform makes sense, but think it’s too politically difficult to achieve. This project challenges that notion and puts forward a clear roadmap for change. For politicians searching for a circuit-breaker on state tax reform, this model offers generous but logical concessions for existing owners, choice for future buyers, and an attractive introductory period to secure support early on. It is complex at the policy design back-end but simple at the taxpayer front-end. Read the report.
The Speculative Vacancy Report
The Speculative Vacancies report was born in 2007 when as a cyclist Karl Fitzgerald noticed a disparity between media headlines decrying a ‘record low land supply’ and the dozens of vacant homes he passed on his daily commute. Since then Prosper Australia has investigated the role of vacant land and housing on housing affordability in Melbourne. Water usage data provided by Melbourne’s water authorities is measured as a proxy for vacancy. Speculative Vacancies are determined when sites are found to have abnormally low water consumption over a full twelve month period.
- Speculative Vacancies 9: Impeding the Market (by Karl Fitzgerald)
- Speculative Vacancies 8: The Empty Properties Ignored by Statistics (by Catherine Cashmore)
- Speculative Vacancies 7: Empty Investment Homes Ignored (by Catherine Cashmore)
- Speculative Vacancies 6: Speculative Vacancies in Melbourne 2013 (by Phil Soos & Paul Egan)
- Read past reports (2007 – 2012)
The Unspoken Alternatives to Expensive Housing (by Cameron Murray) Most housing subsidies end up increasing landlord and developer profits rather than reducing housing costs for residents. Public land rent schemes that provide discounted land access to owners, and private Community Land Trusts, are proven ways to ensure that subsidies reduce costs for homeowners. Read the report.
Trickle Up Economics: Assessing the impact of privatized land rent on economic growth (by Gavin Putland) This report investigates the relationship of the land rent share of GDP with economic growth. Since the Second World War, there has been a negative correlation between Australia’s total land price and the rate of economic growth. The public narrative focuses on wages losing out to the income flows to capital. Our analysis demonstrates how rapidly rising land prices and a poorly targeted tax system have ‘squeezed’ both labour and capital. Featuring a very powerful graph. Read the report.
The First Interval – Evaluating ACT’s Land Value Tax Transition (by Cameron Murray) In 2012 the Australian Capital Territory began a multi-decade task of major land tax reform to exchange taxes on transactions for taxes on the economic rents that accrue to landholders. This report evaluates the economic effects of these changes at the first interval, 2016, to tease out potential lessons from this rare policy experiment. Read the report
Total Resource Rents of Australia – Harnessing the Power of Monopoly (by Karl Fitzgerald) The Total Resource Rents of Australia report finds monopoly rents are capable of replacing taxation at all levels of government. In 2011-12, local, state and federal governments required $390.067 billion in operating revenue. The most efficient form of government revenue-raising, the taxation of economic rents, can raise 87% ($340.719 billion) of revenue needed. A fairer, more equitable tax base is possible by switching taxes off the productive sector and onto monopoly rents. This report demonstrates the possible revenues available from such a tax shift and gives an overview of potential outcomes. Read the report.
Written Off: Negative Gearing Report (by Phillip Soos) Negative gearing is a popular investment strategy as it allows a net loss to be deducted against an investor’s personal tax liability at their marginal tax rate.As a policy, negative gearing creates a substantial cost to taxpayers: it is estimated that $33.4 billion of tax revenues in real terms was forgone from 1993-94 to 2009-10. It is recommended that, at a minimum, negative gearing be quarantined to the purchases of newly-constructed dwellings, or preferably, be abolished. Read the report.
Past reports and archives:
- From the Sub-Prime to the Terrigenous (by Gavin Putland) A definitive investigation of the role of land prices in the Global Financial Crisis. Read the report
- Unlocking the Riches of Oz – How capturing economic rents makes economic sense (by Bryan Kavanagh) This landmark report uses Australia’s uniquely available land data. Read the report.
- The Taxable Capacity of Australian Resources (by Terry Dwyer) This article published in Tax Forum, 2003, systematically spells out why a rent-based taxation system is theoretically possible and where this system has worked. Read the report.
- The Elected Representative’s Guide to Site Revenue for Public Finance (by Lev Lafayette) A guide for councillors prepared for the 2006 Victorian local government election. Analyses the efficiency of Site Rating over CIV taxation. Read the report
- Victoria’s Municipal Rating System – AIUS Report ( by Phil Andersons) Since 1949, Prosper has collected and analysed data comparing the economic outcomes of local government ratings base. Access archive studies via Land Values Research Group. In this 1996 report, Phil Anderson anlayses how these different rates effect local employment and growth prospects. Read the report.
- Land Values Research Group. A wealth of data and analysis to investigate the viability of a tax shift from labour to resource rents. Evidence going back to 1943. Check ‘Collapsing Economies’ by Bryan Kavanagh. Go to LVRG website.
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