For all the talk of the benefit of land taxation, most Australian economic commentators have so far ignored the experiment happening in our nation’s capital.
Since 2012 the ACT has been phasing out stamp duties and phasing in land value taxes.
To see what lessons can already be learnt from this experiment, Prosper Australia commissioned me to delve into the data and see what is really happening.
The results of that effort are in a report that has been released today. It is called The First Interval – Evaluating ACT’s Land Value Tax Transition
If you are in Canberra, come along to the report launch at lunchtime today:
12.30-1.15pm Monday 12 September 2016
Boardroom, Hotel Realm 18 National Circuit BARTON ACT
For those who can’t make it, a quick summary of the main findings are:
• Increasing land tax rates appears to have deterred housing speculation
• Future land tax obligations are already capitalised into lower land prices
• Because of this, new home buyers save between $1000 and $2000 per year on mortgage costs
• New housing construction has remained strong during the tax transition period
• Residential rental growth is at historical lows, benefiting renting households
• The distribution of land tax obligations between different types of land holders is the main political sensitivity
The full report is here.