b'JULY 2020Land tax is the only tax on property that keeps paceStamp duty more with economic growth 7 . It facilitates infrastructure contributions from all of society that benefits fromthan doubles most economic growth and subsequent general land value increase, and from owners close to newtransaction costs. infrastructure, who enjoy a higher value uplift and therefore would pay more land tax. This deters transactions, The incentive for councils or strategic planners toresults in significant leverage strategic planning to raise funds would be removed. For example, Councils or strategic plannersunder-utilisation of the may include lower FSR or height controls than suggested by sound planning analysis, then offerhousing stock and has developers bonus height or density in exchange for contributions to local or state infrastructurean estimated loss of implemented through Planning Agreements. Instead the emphasis would be on creating plans that arebenefit to the community transparent and straightforward. Imagine how simple it would be if the tax systemin the order of $375 automatically generated additional funding whenmillion per annum. new infrastructure had been built or was required in response to increased density or a change inReplacing stamp duty land use? There would be no need to haggle over infrastructure and contributions with developers. Thewith a broad-based burden of new growth-related infrastructure would be shared between the society as a whole and theland tax could release purchaser of a new home.In December 2016, Infrastructure Australia founda significant amount of that a broad-based land tax can provide an efficient, sustainable and permanent approach tounder-utilised housing value captureThis approach would provide a fairer, more efficient way of raising infrastructureand reduce house funding, and move away from the many challengesprices by about 6% after posed by the volatility and unpredictability of property prices. 8 several years.In essence, all the experts agreeso if it is that obvious, why hasnt the change been made? Also, how will the transition be managed? People It will be hard work to change Australias taxwho have recently paid stamp duty would be structure, even when it is universally acknowledgedopposed to paying twice through a new annual to be the correct policy response. The currentland tax bill on that same property. The ACT provides mechanism for allocating GST revenue between thea contemporary solution. Stamp duty there was states could penalise the first movers, particularlygradually phased out over 20-years and replaced where the volume of revenue is increased. with land tax. Various tax reviews have also Any broadly applied land tax will pose difficultiesconsidered a credit scheme that could facilitate a for people who are asset rich but income poor.faster transition between the taxes. 9Conversely it would encourage downsizing, which fosters the efficient use of housing stock and land, which are our most valuable assets.107 Ibid., p7.8 Infrastructure Australia, Capturing Value: Advice on making value capture work in Australia, Dec, 2016, pp 6-7.See also pp 23-24.9 See Coates, B. and Nolan. J., Op.cit., pp 8-10.'