Replace Stamp Duty with Land Tax

I propose that the Victorian state abolish stamp duty on property transfers and implement a broad based land tax. The land tax should not have exemptions for principal place of residence or primary production or charities, it shall apply to all land and without thresholds, without progressive rates and without differing rates for land use. The one flat rate shall be designed to make the tax shift revenue neutral.

Stamp Duty is very inefficient, keeping people stuck in properties they rather would not be in. It is also very inequitable in that only people who have to move their residence pay the tax.

Land tax will put a holding charge on a site which will be an incentive for landholders who have vacant land or underutilised land to put it to a higher use or sell it to someone who will put it to a higher use. The extra supply of land will tend to decrease the price of land, easing housing affordability.

Land tax is very equitable in that everyone who holds land will pay according to the benefits of that site. Site values are not created by the land holder but by the infrastructure, services and population near that land.