I don't want convicts living near me.
Anyway, what you're saying doesn't make sense: (let me explain)
Land Price Up = Good
Land Price Down = Bad
I don't get it; you want land prices to go down?
Are you even on Team Australia?

Yes way too high! If we could just get rid of four things, we'd likely fix the problem? And those four things are?

1# pollies with investments in real estate and therefore a powerful vested interest in maintaining the status quo! [Well, if there's another valid reason for us having the highest median house prices in the english speaking world, what else could it be?]

2# foreigners with investments in existing real estate and for virtually the same aforementioned reasons.

3#Negative gearing applied to existing real estate, when it should only ever apply exclusively to brand new never ever lived occupied or worked in real estate, and then only for a maximum of 5 years!

4# Commissioned real estate agents who can talk the leg off the table, and are forever talking up the value, just so they can pocket a larger fee or commission; which should be both outlawed and replaced with a standard fee for a service; and salaried staff only!

Which would then see volume replacing margins; and consequently, far fewer agents and lower prices! It's just too easy!

What would further assist just that outcome, would be the long overdue roll out of rapid rail, and needed if we're ever to actually decentralize?

One thing there's no shortage of in Australia is land! And whole new towns have become viable overnight with the emergence of desal, for quarter of the price of traditional desal, and where some 97% of the water is the recovered potable water!

And of course the powerful developers with pollies in their pockets, will lose out with decentralization and the acre block replete with a veggie garden and the almost obligatory chook Hilton, replacing the tiny boxes they're pushing?

[And means the city dweller is virtually forced to produce 2.5 times the carbon of his country cousin!]

Which likely explains why decentralization and consequent much lower house prices are so rigorously resisted by risible rascals?
Rhrosty.

Bryan Kavanagh is obviously not a property owner.

One question Bryan, suppose in some parallel world you became the sole ruler and initiated your proposal. How long do you think you would remain in power when everyone is revolting over their property values decreasing by 75% and their taxes going up?

I can't see why you would even bother to share such craziness. Who do you think is going to go along with your plan, besides the people who have nothing presently?

One would assume that if land was taxed, then to compensate, other taxes would have to go down, or am I missing something?

It sound like a totally dumbass idea. What you are saying is that instead of paying $500 a week to the bank, we pay a land tax of $250 and another $250 to the bank. So we are still paying $500 per week but somehow we would all be better off.

Now lets put inflation into the equation. Inflation is great if you have a mortgage because your income is inflated but your mortgage stays the same. Now lets look at Land Tax. Government loves all that Land Tax revenue and they don't like to see it whittled away by inflation so they raise it every year. If you don't believe me, just take a look at your council rate notice which is just a form of Land Tax.

The net sum of all this is that instead of a mortgage decreasing every year, you have a government tax increasing every year.

On the plus side, you wouldn't have to worry about pensioners in million dollar homes. They wouldn't be able to afford the Land Tax and would be living on the street.

Raising revenue by taxing land has one benefit. It is hard to evade the tax: every other tax can be circumvented by cunning lawyers, money is fungible. There is a tendency for councils to take on more community services, hence land tax is becoming a more significant contributor to revenue. There is a case for State governments to raise land taxes, especially on unimproved land. One sees land in cities vacant for years.

ConservativeHippie, I think you wrote something similar on another thread and I said I'd respond to it later, but I forgot which thread it was. Assuming it was you, I will address your concerns here (and if it was someone else, the same goes for whoever it was).

The best solution would be to phase the land taxes in over a few decades, so that land prices wouldn't actually fall but would rise more slowly. IMO the best way to do it would be to do nothing except announce it for the first decade, after which the rate would be raised by 0.1% of land value every year, with other taxes cut to compensate. I think such a plan would probably require a referendum to implement, as ordinary legislation could be reversed for short term political gain.

I think it would be most effective if, during the time it's phased in, we move to a policy of permanently low interest rates. Not only would this ensure land prices continued to rise, but it would prevent lower interest rates leading to land price bubbles, so the RBA wouldn't have to be so timid about cutting interest rates to stimulate business.

___________________________________________________________________________________

Wattle, if we are still paying $500 per week but somehow we would all be better off, it isn't dumbass at all - it's the most sensible option.

It sounds to me like you're labelling it dumbs because you don't understand how we would all be better off if we were paying the same amount. The answer is simple: the government would be able to afford to cut other taxes by the same amount.

And if pensioners had homes they could sell for a million dollars or more, they certainly wouldn't be living on the streets!

Aagh.... if only it were that simple.

I offer the experience of my recently sold Canberra house to show it doesn't.

Market Rent for house: $500 p.w. or $26,000 p.a.
(after all it was only a 60 year old 3br ex-government house)

Govt Costs: Rates @ $3000 + Land Tax @ $7,500 = $10,500 p.a.

Net return = $15,500 p.a.

at 4% commercial return would value the Land and House at
($15,500 X 100/4 =): $387,500

Achieved Sales Price however was almost $700,000.

Sadly prices are held high by other factors.

The quickest & best way to get land prices down is to get all government the hell out of land development, both in the amount they rip off the developer, & in the restriction on land owners dividing & selling some of their own land, & the idiot requirements the developer has to supply.

A neighbour has subdivided a couple of hundred acres of the least productive bit of his farm. This allowed him to give one son the viable farm remaining, & his other 2 kids cash to a similar value.

8 years ago an acre block sold for $56,000. Today he has to pay government, commonwealth, state & local, over $112,000 for each block he divides. In addition the required infrastructure is much greater, & more expensive. Blocks are now $265,000 each.

He had to find water, sink a bore, build a treatment plant, then give the lot to council as part of the development. He decided to not sell a couple of 5 & a 10 acre blocks at the end of the block, because he would have to run town water from the plant too far to be viable. Other acreage developments have not had to supply water.

Forget controlling price by giving government more, get their fingers out & prices will drop dramatically.

Continued

Continued.

Then of course we have the idiots of all idiots, the planners.

If you want something stuffed up, just get the government idiot, a planner involved. WE all know bureaucrats get most things wrong, when ever they actually do anything. This is probably why they desperately avoid actually doing anything when it comes to granting permits. Get these idiots out of planning development, & all will improve, & be much cheaper.

I don't know if they are in the pockets of some developers, but it would seem so. At least I know they are not in my farmer neighbours pocket, by the amount he complains about them, when he brings my wife something to witness.

However a couple of years ago they convinced our council there should be a new plan, allowing no more development in our area. We all believe this is to help the near by Yarrabilba 50,000 satellite city development keep their prices high.

Two of my kids would like to live here, & I would be happy to give them a couple of acres each to build a home on.

However;
1/ I am not allowed to split off any land, even for family.
2/ I am not allowed any more than one freestanding building with a kitchen, on the property.

The no development rule is quite recent, about when Yarrabilba started, hence our suspicions, but the no second free standing building with kitchen rule is not. 23 years ago to install my transportable granny flat brought from my last property had to be grafted onto the existing house to please the planners.

I have a large 2 car carport, grafted onto both buildings, over the top of a septic tank, & a similar grey water pump out tank. As access for a pump out tanker must be maintained, this totally useless edifice, that cost me $8,000 23 years ago, sits as a monument to bureaucratic & planning stupidity.

Any wonder I believe our main problem today is bureaucracy gone mad. I hate the thought of giving them any more money, in any way.