It seems as if the cancer of land speculation had already taken root in Australia as early as 1808, 200 years ago. The Australian Newspaper reported on 23 January 2008:

http://www.theaustralian.news.com.au/story/0,25197,23094393-5013404,00.html
RUM REBELLION BLAMED ON DEVELOPERS

AUSTRALIA's only military coup, the Rum Rebellion, had
nothing to do with alcohol and everything to do with
that "very Sydney" preoccupation, real estate, a top
judge says.

Delivering the Australia Day Address in Sydney last
night, NSW Chief Justice James Spigelman said the
overthrow of governor William Bligh on January 26,
1808, followed "the first attempt at town planning
in Sydney".

The colony's first governor, Arthur Phillip, had intended
to reserve the land between Hunter Street and Sydney Cove
for public purposes, a plan abandoned by successors who
granted leases of up to 14 years. Bligh wanted to revoke
the leases and return to Phillip's plan.

"The traffic in rum was of little, if any, significance,
except to some of the non-commissioned officers," Justice
Spigelman said. "Much more important, amongst multiple
causes, was the conflict between real estate developers
and the public interest over the exploitation of prime
urban land near the water. ..."

...

THE full text of the Chief Justice of NSW's Australia Day
address can be found at: http://www.theaustralian.news.com.au/story/0,25197,23092781-5006784,00.html

Also, for an excellent history of land speculation in Australia since the time of the gold rush, please refer to Sheila Newman's 2002 Master's Thesis "The Growth Lobby and its absence", (2.6MB PDF) downloadable from http://candobetter.org/sheila

“Treating financial transactions concerning land speculation as different from other transaction could serve the best interests of the majority of society.”

What you are suggesting is “land speculation” be made a “special case” or “exception” to the rules which apply to everything else, because of some supposed “best interest of the majority of society”.

That is similar to proposing a pay-rises to nurse, outside inflationary norms, which apply to everyone else, because we all know that, due to the work they do -

Nurses are always a “Special Case”,

I, personally, do not believe in “Special Cases”.

There are only good cases and bad cases.

Special cases and “exception to the rules which apply to everything else” are, upon closer inspection invariably, bad cases dressed up, usually with some emotion, to be presented as something “special” or as an “exception” – just like your proposal.

(“Affirmative action” is another example of the “Special case” abomination)

As for the “best interests of the majority of society”.

If you were to ask “society”, in a balanced survey (no loaded questions), if they thought “insider trading” was a bad thing, they would probably reply in the affirmative. Thus, we have laws which attempt to curtail “insider trading”.
If you were to ask them if they supported making different rules for land speculation versus (say) share speculation, they would not give a toss and most could not distinguish between the two.

Another issue is one “special case” begats more “special cases”.

Australian law, especially tax law, is too unwieldy already. Multiple “exceptions” and “special cases” will exasperate the whole process.
This in not a “moral argument” but a “real practical issue”.

If “society is to be best served” by the government it elects to represent its interests, the process of collection of taxes is best expedited by being streamlined and simplified.
“Special cases” and “exceptions” introduce added “complexity” and thus administrative expense.

Therefore – to paraphrase you

Treating financial transactions concerning land speculation as different from other transaction WOULD NOT serve the best interests of the majority of society.

Col Rouge,

What you seem to be arguing is that the addition of any complexity to our tax laws must necessarily outweigh any potential benefit to society.

In the case of the negative gearing tax concession, if it's abolition allows a few more people to own their first home at the expense of other who already own one or more homes, then the advantage would be self-evident to all except the small minority of society who have a vested interest in maintaining the current arrangement.

I happen to agree that the tax laws happen to be overly complex (and it seems ironic that this is still the case years after the unlamented former PM John Howard promised everyone that his GST would instantly fix everything). However, I am sure there would be many ways that the small additional complexity entailed in the abolition of the negative gearing scam could be more than offset by reducing complexity elsewhere.

Perhaps we should consider adopting New Zealand's tax system which, as I was led to understand, doesn't allow any deductions from gross income. This allows a lower overall tax rate and through that delivers roughly the same benefit to New Zealand Taxpayers on average as would be the case if deductions were allowed.

Residents of the Gympie regional Council area in South East Queensland can vote at the 15 March local government elections for a team determined to protect the area from further ravages at the hands of property developers and land speculators. The team is "Integrity Gympie" and its web site is at http://www.integritygympie.com

If you live in or near the Gympie area and are in a position to help you can contact them through their contact page at http://www.integritygympie.com/contact.htm

I have also written about "Integrity Gympie" on my own web site at: http://candobetter.org/IntegrityGympie

An article "Mortgage pain for 750,000 owners" by Maxine Frith published on 3 February in the Sydney Morning Herald at http://www.smh.com.au/articles/2008/02/02/1201801094694.html may be of interest.

It begins:

"UP TO 300,000 Australians risk losing their homes this year as rising interest rates and the credit crunch fuel severe debt."

It continues:

" ... research ... predicts that 750,000 owners will be hit by 'mortgage stress' in the coming months, meaning more than 35 per cent of their income will be swallowed by home-loan repayments.

"Of those, between 250,000 and 300,000 will suffer from severe mortgage stress, where they begin defaulting and risk having their homes repossessed.

"The prediction of severe mortgage stress has more than doubled since the last JPMorgan-Fujitsu report in September, which estimated about 113,000 homeowners were at risk.

"The number of repossession writs issued by the NSW Supreme Court has already risen by 67 per cent over the last two years, with 3935 orders issued in 2007.

"Kim Quick, senior valuer at property advisers Herron Todd White, said increasing numbers of people were stuck in a housing trap where their home was no longer worth what they paid for it because it was over-valued when they bought it.

"'A few years ago people were desperate to get on the housing ladder and were convinced that property prices were just going to go up and up,'" she said.

"'Now they can't afford to stay but they can't afford to go either.'"