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.

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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.